Creating value
by delivering
quality
Annual Report and Accounts 2015
Welcome
Our vision is to be
the UK’s leading
residential
developer for
creating value and
delivering quality
What’s inside
Strategic Report
2
42 Governance
92 Financial Statements
147 Shareholder Information
Delivering
quality for all
our stakeholders
Sustainability Report 2015
Visit us online at www.taylorwimpey.co.uk
2015 Overview
Operational highlights
• Completed a total of 13,219 homes,
excluding joint ventures, across the UK,
up 7.5% (2014: 12,294 homes)
• 8.0% increase in total average selling
price to £230k (2014: £213k)
• Short term landbank of c.76k plots
with 60% sourced from the strategic
land pipeline
• Acquired 6,971 high-quality plots in
the short term land market
• Worked with communities, planners and
landowners to convert a further 8,660 plots
from the strategic pipeline
• Record year end order book representing
7,484 homes (31 December 2014: 6,601)
with a total value of £1,779 million
(31 December 2014: £1,397 million),
excluding joint ventures
Our integrated approach
As part of our continued commitment to good
reporting, this year we have evolved the way we
report by integrating aspects of our sustainability,
operating review and Key Performance Indicators
into our Business Model. Our aim is to balance
the long term economic stability and growth of our
Company with our responsibilities to the environment,
society and the local economies in which we operate.
See our Chief Executive’s
Review on page 12
Where can I find key information?
Investors
Our Investment Case pages 6 to 7
Chief Executive’s Review pages 12 to 17
Our Business Model pages 18 to 33
Group Financial Review pages 38 to 41
Governance pages 42 to 91
Remuneration Report pages 68 to 85
Current and prospective employees
Where We Operate pages 4 to 5
Chief Executive’s Review pages 12 to 17
Our Business Model pages 18 to 33
Our People pages 30 to 31
Customers
Where We Operate pages 4 to 5
Our Business Model pages 18 to 33
Customer Service pages 20 to 21
See our Chairman’s
Statement on page 10
See our Group Financial
Review on page 38
In This Report
Strategic Report
4 Where We Operate
6 Our Investment Case
8 Our Market Review
10 Chairman’s Statement
12 Chief Executive’s Review
16 Our Strategy
18 Our Business Model
34
Our Approach to Risk
Management
36 Principal Risks and Uncertainties
38 Group Financial Review
Directors’ Report:
Governance
44 Board of Directors
46 Corporate Governance
51 General Board Governance
58 Nomination Committee Report
63 Audit Committee Report
68 Remuneration Report
Statutory, Regulatory
86
and Other Information
Financial Statements
94 Independent Auditor’s Report
98 Consolidated Income Statement
Consolidated Statement of
99
Comprehensive Income
100 Consolidated Balance Sheet
101 Consolidated Statement of
Changes in Equity
102 Consolidated Cash Flow
Statement
103 Notes to the Consolidated
Financial Statements
135 Company Balance Sheet
136 Company Statement of
Changes in Equity
137 Notes to the Company
Financial Statements
142 Particulars of Subsidiaries,
Associates and Joint Ventures
146 Five Year Review
Shareholder Information
147 Notice of Annual General Meeting
150 Notes to the Notice of Meeting
156 Shareholder Facilities
157 Principal Operating Addresses
www.taylorwimpey.co.uk
Financial highlights
Revenue (£m)
Operating profit* (£m)
Profit before tax and
exceptional items (£m)
Profit for the year before
exceptional items (£m)
Adjusted basic
earnings per share†† (p)
3,139.8
637.0
603.8
482.3
14.9
3,139.8
2,686.1
2,295.5
3,500
3,000
2,500
2,000
1,500
1,000
500
637.0
480.7
312.9
700
600
500
400
300
200
100
700
600
500
400
300
200
100
603.8
450.1
268.4
500
400
300
200
100
214.7
482.3
15
14.9
359.7
11.2
10
5
6.7
0
2013
2014
2015
0
2013
2014
2015
0
2013
2014
2015
0
2013
2014
2015
0
2013
2014
2015
Tangible net asset
value per share† (p)
Return on net operating
assets** (%)
Year end net cash (£m)
83.5
27.1
223.3
Total maintenance
dividend per share (p)
(subject to shareholder
approval)
1.67
1.67
1.56
2.0
1.5
1.0
0.5
0.69
83.5
77.9
69.6
100
80
60
40
20
0
2013
2014
2015
0
2013
2014
2015
Note: Definitions can be found in the Group Financial Review on page 40.
30
25
20
15
10
5
0
27.1
22.5
16.8
250
200
150
100
50
223.3
112.8
2013
2014
2015
0
2013
2014
2015
5.4
Highlights for 2015
1
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Strategic Report
4 Where We Operate
6 Our Investment Case
8 Our Market Review
10 Chairman’s Statement
12 Chief Executive’s Review
16 Our Strategy
18 Our Business Model
34 Our Approach to
Risk Management
36 Principal Risks
and Uncertainties
38 Group Financial Review
2
3
Taylor Wimpey plc
Annual Report and Accounts 2015
Where We Operate
We are a national developer operating at a local
level from 24 regional businesses across the UK,
and we also have operations in Spain
North Division
Our North Division covers
our East and West Scotland,
North East, North Yorkshire,
Yorkshire, North West,
Manchester, North Midlands,
Midlands and West Midlands
regional businesses.
Central and South West Division
Our Central and South
West Division covers our
East Midlands, South
Midlands, East Anglia,
Oxfordshire, South Wales,
Bristol, Southern Counties
and Exeter regional
businesses.
• We have seen a steady market throughout
Completions excluding JVs
Average selling price (£k)
the year in this division
• Average selling price on completions
increased by 7.1% to £196k (2014: £183k)
32%
29%
• Private sales rate increased by 12.1% to
0.65 homes per outlet per week (2014: 0.58)
Scotland and North East
Yorkshire and North West
West Midlands
39%
210
200
190
180
206
196
191
192
Scotland
and North
East
Yorkshire
and North
West
West
Midlands
Average
selling
price
• We have seen a steady market throughout
Completions excluding JVs
Average selling price (£k)
the year across most geographies in
this division
• Average selling price on completions
increased by 8.5% to £218k (2014: £201k)
• Private sales rate increased by 15.4% to
0.75 homes per outlet per week (2014: 0.65)
Eastern
South West and Wales
47%
53%
230
240
220
200
218
205
180
Eastern
South
West
and
Wales
Average
selling
price
www.taylorwimpey.co.uk
UK map key
Head Office
Regional Offices
North Division
Central and South West
Division
London and South East
Division
London Market
London and South East Division including Central London
Our London and South East
Division includes Central
London and covers our
East London, North Thames,
South East, South Thames
and West London regional
businesses.
• We have seen the strongest market growth
outside central London. In central London,
the market was stable during the year
• Average selling price on completions
• Private sales rate increased by 14.1% to
increased by 11.0% to £313k (2014: £282k)
0.89 homes per outlet per week (2014: 0.78)
Spain
We build high-quality homes
in the popular locations of
Costa Blanca, Costa del Sol
and the island of Mallorca.
• We have seen a meaningful improvement
in the Spanish market in 2015
• We completed 251 homes in 2015
(2014: 164) at an average selling price
of €315k (2014: €250k)
• The total order book as at 31 December
2015 stood at 270 homes (31 December
2014: 233 homes)
Completions excluding JVs
Average selling price (£k)
South East
(excluding London Market)
London Market
34%
66%
Note: The London Market
includes the area inside the M25
• The Spanish business delivered an improved
operating profit* for 2015 of £10.0 million
(2014: £4.2 million) and an operating profit*
margin of 17.2% (2014: 12.5%)
390
340
290
240
381
313
277
South
East
(excluding
London
Market)
London
Market
Average
selling
price
Average selling price (€k)
400
300
200
100
0
315
250
2014
2015
4
5
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Our Investment Case
Creating value by delivering
quality through the housing cycle
for all our stakeholders
The UK housing cycle
We operate in a cyclical market. This can be very easy to forget when the market is positive.
We take a much more proactive approach to managing the cycle than has historically been
done before. We also aim to be transparent about our position in the cycle, and the impact
it has on our performance.
Our strategy does more than acknowledge that we operate in a cyclical market, it is a fundamental part of it. Our strategy is an agile framework,
which is set for the long term and adapted through the cycle, with the consistent underpin of a strong set of strategic principles. These principles
are set out on page 16 and remain as valid now as when we first set them out in 2011. Our strategic objectives for the long term and for the
medium term are set out on pages 16 to 17.
A key part of our proactive management of the cycle is the ability to adapt our tactics dependent on market conditions and external factors.
Whilst we do not expect to be able to forecast the timing of this entirely accurately, determining the stage of the cycle affects our decisions
ranging from land investment through to returning cash to shareholders.
The positive market conditions have enabled us to make significant progress towards our medium term targets and deliver ahead of our own
expectations. See pages 8 to 9 for further information on some of the key housing market indicators, along with a brief commentary on their
relevance to the UK housing cycle.
Our view of the UK housing cycle
We believe that we are currently
operating in the Growth stages of the
housing market, with good accessibility
to mortgages for customers and house
price growth. The land market remains
stable and positive.
G rowth
Housing cycle
R
e
c
o
v
ery
w nturn
o
D
Growth
• Growth is driven by unsatisfied demand and greater accessibility to
and affordability of finance
• There is house price growth in this stage at varying levels
• As maturity is reached, there is good accessibility to mortgages,
at affordable levels, and house price growth at sensible levels
• It is important to monitor the Growth stage closely for unsustainability
which can lead to a peak in the market. The peak can be preceded
by a period of ‘heat’ and unsustainable growth in house prices and
transaction levels. This is typically accompanied by a very competitive
land market
Downturn
• This is an extremely volatile stage of the housing cycle
• In this environment, house prices and housing transactions will fall to
a ‘trough’
• The speed and depth of the downturn will depend on the
preceding peak of the market and the conditions leading to this
Recovery
• This stage begins when there is a relative period of stability after
extreme volatility and a floor has been established in house prices
• Transactions will still be at low levels and we would expect house
prices to remain stable at lower levels, or see small incremental increases
www.taylorwimpey.co.uk
Why invest in Taylor Wimpey
With an experienced Management Team and in-depth local expertise, our strategy is
differentiated by a long term focus on value and on achieving both our financial and quality
objectives sustainably in a cyclical environment. This has enabled us to deliver a record
operating profit* margin in 2015 and return over £308 million to shareholders. In 2015 total
shareholder return increased by over 55%.
How we are different
The strength and quality of our landbank is a key differentiator for Taylor Wimpey. We have invested in new land at the
right time and in the right locations, growing the scale, quality and future profitability. This has been supported by record
conversions from our strategic pipeline. This approach has enabled us to consistently grow our margins and returns to
shareholders, and set new records in both, whilst continuing to invest in the future of the business.
How we are different
We operate in the cyclical housing market and we take a much more proactive approach to managing the cycle, than
has historically been done before. Our focus is on delivering sustainable growth and value generation in a balanced,
consistent way through the housing cycle.
How we are different
We believe that the underlying quality of the business is very important and is worth investing in. This includes our
non-negotiable approach to health and safety and our focus on our people, product and customer service.
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For more information see pages 22 to 23
For more information see pages 6 and 8 to 9
1 Opportunity led land investment
2 Proactive management of the cycle
3 Underlying quality business
4 Returns focused
5 Long term sustainable focus
For more information see pages 13 and 88
For more information see pages 18 to 33
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For more information see pages 18 to 33
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How we are different
Our dividend policy is inherently linked to our strategy and reflects the cyclical environment in which we operate. Our
policy consists of a regular maintenance dividend, which is currently set at 2% of net assets, the top end of our range
of 1-2%, in addition to a return of surplus cash to shareholders at the appropriate times in the cycle. A key part of the
rationale of our approach to running the business in a sustainable way is to give investors a significant, consistent and
reliable dividend stream.
How we are different
We are focused on the long term sustainability of the business, not just the short term performance. Sustainability
is fundamental to each aspect of our Business Model and value cycle and, therefore, to the long term success of
our business.
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7
Taylor Wimpey plc
Annual Report and Accounts 2015
Our Market Review
Proactively managing the cycle
A key part of managing the cycle is the need to continually monitor market conditions using external
indicators. These help assess where we are in the cycle and, whilst we will not always get this right,
we can adapt our tactics accordingly.
Our place in the UK market
• We are one of the largest residential
developers in the UK
• We operate across Scotland, England
and Wales
• We completed 13,341 new homes
in 2015, including joint ventures, of
which 19% was affordable housing
• We built more homes in 2015 than at
any other point in the previous six years
• We contributed over £335 million to
our local communities via Section 106
and Section 75 planning obligations
• We build a wide range of homes to match
the demographic profile of our customers
• In 2015, we continued to work with
local authorities, communities and
vendors to bring forward land for
development, with 8,660 plots
converted from the strategic pipeline
• We work with stakeholders to develop
all sites with implementable planning as
efficiently as possible
More information can be found
on pages 4 to 5
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New build completions
• There continues to be a fundamental demand and supply imbalance in the UK
• It is estimated that the current UK requirement is to build c.250,000 homes per annum
• The new build market accounts for 10-15% of the total housing market
UK housing completions by sector
0
0
0
,
0
0
4
0
0
0
,
0
0
3
0
0
0
,
0
0
2
0
0
0
,
0
0
1
0
1970
1985
2000
2015
Total
Private
Housing associations / Council
Financial year ending
Source: DCLG
Planning
• Planning has historically been a constraint on the ability of the industry to build a sufficient
number of new homes
• The changes to planning policy over the last five years (e.g. Localism Act, National Planning
Policy Framework) have resulted in an improved environment, however we recognise that
we have not seen the full benefits flow through into the planning system yet
Residential units approved – % change year on year
● H1 2015
● 2014
● 2013
● 2012
60
50
40
30
20
10
0
-10
-20
-30
North of
England
Midlands
Southern
England
England
Wales
Scotland
Great
Britain
www.taylorwimpey.co.uk
UK market outlook
• The market continues to show price
growth and very good sales rates across
most geographies. In central London, the
market is stable, with flat prices and sales
rates returning to a more normal level
• Material pricing remains broadly flat
and we have seen a reduced rate of
inflation on labour pricing. We anticipate
underlying build costs will increase by
3-4% in 2016
• The short term land market remains
stable and positive, with attractive
opportunities available to purchase land
• The strategic land environment remains
good, with some new competition from
listed players since 2013
• We continue to await the full details
of the Starter Homes initiative, and
we will continue to monitor this
• We will continue to monitor the debate
around the upcoming European Union
(EU) referendum. As a business whose
customer base and supply chain is
principally in the UK, we believe the
only material risk is around economic
confidence and transition in the event
of an exit
More information can be found on page 17
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Mortgage availability and affordability in 2015
• The overall economic and financial environment in the UK is a key dynamic for the
housebuilding sector
• There remained good accessibility to a wide choice of competitive mortgages
• Consumer confidence was strong
• Interest rates continued to remain historically low
• The tighter lending requirements, introduced in 2014 as part of the Mortgage Market Review,
continued to help ensure that monthly payments remained affordable, aiding the stability
of the market
Value of approvals for mortgages (£m)
80,000
60,000
40,000
20,000
0
Jan
2014
Source: Bank of England
Dec
2014
Nov
2015
First time buyer mortgage payments as % of pay / interest rates
100%
y
a
p
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m
o
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-
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k
a
t
f
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%
80%
60%
40%
20%
0%
London
UK
Interest rate (%)
16
12
8
4
0
)
%
(
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t
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r
t
s
e
r
e
t
n
I
1983
1987
1991
1995
1999
2003
2007
2011
2015
Source: HBF
Source: Nationwide / Bank of England
8
9
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Annual Report and Accounts 2015
Chairman’s Statement
2015 has been a record year
for Taylor Wimpey
2015 performance
2015 has been a record year for Taylor Wimpey
in a number of ways. In the first year of delivery
of our three year medium term targets, which
we set out in May 2014, I am very pleased
to report to you that we achieved a record
operating profit* margin of 20.3% (2014:
17.9%) and a return on net operating assets**
of 27.1% (2014: 22.5%), outperforming our
own expectations and against a backdrop
of a more positive housing market.
year to the full review of our customer
service processes and culture, which we
were undertaking to ensure we delivered a
high-quality homebuying experience for all of
our customers. During 2015, we completed
this review and are now focused on the
process of implementing and embedding a
number of changes throughout the business.
Further detail is set out on pages 13, and 20 to
21. This is an area that will take time to embed
but will remain firmly on our Board agenda.
Taylor Wimpey businesses across the country
have long had a reputation for supporting
charities, both locally and nationally. During
2015 we donated and fundraised over
£746k for registered charities (2014: £539k),
in addition to a further c.£112k for other
organisations. More information on our
efforts, including our charity partnerships,
can be found on page 32 and within our
Sustainability Report 2015 which will be
available on our website in March 2016.
More detailed information on our financial
performance can be found on pages 38 to 41.
The way we do business
We continue to work hard to achieve all of
our objectives and to create shareholder value,
but we are very conscious that we need to do
this in the right way. For Taylor Wimpey, health
and safety remains the non-negotiable top
priority. In addition, our objectives for providing
high quality are just as important to us as our
financial performance.
A key part of this means that we need to be
honest with ourselves where we have not got
everything right and take steps to improve in
these areas. Customer service remains a key
priority, and you may recall that I referred last
We are proud to play an important role in
the communities we operate in. In 2015,
we invested over £335 million in communities
via planning obligations in England, Scotland
and Wales (2014: £300 million) providing
infrastructure, affordable housing and
community facilities including education
facilities, public transport and play areas.
We also sponsor community events, local
sports teams, social clubs and many other
initiatives. It gives our people a great sense of
pride to be able to contribute in this way and
also demonstrates our commitment to the
local people we work with and communities of
which we are part. I am pleased to note that
based on our 2015 employee survey, 96%
of Taylor Wimpey respondents believe that
our developments benefit local communities.
Returns to shareholders
We are delighted that, during 2015, our
total shareholder return for the period from
1 January 2015 to 31 December 2015 has
increased by 55.2%, and since January
2011 has increased by 605.3%, which
demonstrates that the strategy which
we have pursued relentlessly since the
economic downturn is working effectively.
Since we set out and implemented our
strategy during 2011, our earnings per share
have increased by 610%. Our dividend return
is an inherent part of our strategy and the
Board has set out a policy of making cash
returns to shareholders through both regular
maintenance dividend payments and
additional surplus cash returns at the
appropriate time in the market cycle.
We are delighted that shareholders
have continued to benefit from the
success of our strategy with total
shareholder return increasing by
55.2% in 2015.
Kevin Beeston
Chairman
10
www.taylorwimpey.co.uk
The Board’s confidence in the Company’s
performance and the resilient market enabled
us to double our maintenance dividend pay-out
to 2% of net assets, which was announced
with our 2014 full year results in March 2015.
Shareholders have also continued to share in
our success with the second special dividend
of £249.6 million paid to shareholders in July
2015, and a commitment to return a further
c.£300 million to shareholders in July 2016,
as detailed below.
Our 2015 final maintenance dividend of 1.18
pence per share is to be paid on 20 May 2016
to shareholders on the register at the close of
business on 8 April 2016 (2014 final dividend:
1.32 pence per share), subject to shareholder
approval at the 2016 Annual General Meeting
(AGM). In combination with the interim dividend
of 0.49 pence per share (2014 interim dividend:
0.24 pence per share), this gives a total
maintenance dividend for the year of 1.67
pence per share (2014 total maintenance
dividend: 1.56 pence per share). Shareholders
are once again being offered the opportunity to
reinvest all of their maintenance dividend under
the Dividend Re-Investment Plan (DRIP).
As referred to above, and as previously
announced on 29 July 2015, subject to
shareholder approval at the AGM, we will return
c.£300 million, equating to 9.20 pence per
ordinary share. This is proposed to be paid
on 15 July 2016 as a cash dividend to all
shareholders on the register at close of
business on 3 June 2016.
Shareholders will be offered the opportunity to
reinvest all of their 2015 cash dividend under
the DRIP, for which elections to join the Plan
must reach the Registrar by 20 June 2016.
Further details are set out in the Notice
of Meeting on page 147. As previously
confirmed, the Board intends to keep the
mechanics of how the Company will pay
its special dividends under regular review.
Corporate governance
Effective corporate governance provides an
important foundation for our strong financial
performance. Consequently, the Board seeks
to ensure that not only does the Company
comply with corporate governance
requirements and best practice but that
good governance is embedded throughout
the organisation. This provides proper and
appropriate oversight, risk analysis and a
framework of accountability. This also serves
to build trust and strengthens internal and
external relationships and is in the best
long term interests of shareholders.
We firmly believe that open and transparent
disclosure is important and we take our
responsibility to present fair, balanced and
understandable information very seriously
for the benefit of our shareholders and
other stakeholders.
Your Board believes that the effective
stewardship of the Group is enhanced by
the experience, independence and range
of expertise of its members, and we were
delighted to welcome Humphrey Singer as
a further Independent Non Executive Director
(effective 9 December 2015), who brings with
him not only a wealth of financial experience
and acumen but also experience in the areas
of both customer service and digital solutions,
which will be very helpful to the Company.
More information can be found within
our Directors’ Report on pages 42 to 91.
Our people
Our local teams are experts in their
local markets and, both collectively and
individually, they bring great value to the
Group. As a Board, we are delighted that
94% of employees, who took part in our 2015
survey, are proud to work for Taylor Wimpey.
We believe in investing in our people to
enable their future success, and in turn
our Company’s, and to develop our internal
pipeline of talent. Further information can
be found on pages 30 to 31.
Our all-employee share plans have excellent
take up and, as a Board, we are pleased that
over half of all eligible employees participated
in the Company’s all-employee share scheme
or held shares of the Company during 2015.
These plans encourage a greater sense of
alignment between our employees and our
shareholders, together with a greater sense
of pride and ownership of the strategy, by
providing employees with an opportunity
of owning their own personal stake in Taylor
Wimpey and ultimately share in our success.
The Board is therefore pleased to continue with
its strategy of encouraging greater employee
share ownership. More details of our share
plans can be found on page 73.
We continue to make progress in the
areas of diversity and inclusivity, although we
acknowledge that we are still in the early part
of a longer term journey. Our aim is to ensure
we support a more diverse and inclusive culture
and promote greater awareness throughout
the business. During 2015 we established a
working party to review our policies, culture
and practices and appointed a consulting
partner to help us conduct all-employee focus
groups, unconscious bias testing and one-to-
one interviews across the business. Overall
we have a gender mix of 68% male and
32% female across the Company with these
percentages being 22% female on the Board
and 30% female in our Group Management
Team. More detail on our gender and wider
diversity initiatives are set out in the Nomination
Committee Report on pages 60 to 61.
Finally, I would like to take this opportunity,
on behalf of your Board, to thank each and
every one of our employees, who work with
great effort and pride to create value and
deliver quality every day, for their unstinting
commitment and enthusiasm during 2015.
Together, we are committed to developing a
robust and ever stronger Group for the future
and delivering long term sustainable value to
our customers, employees and shareholders.
Board diversity
Senior Management diversity
Employee diversity
2
7
Corporate Governance pages 46 to 50
KPI
Board of Directors pages 44 to 45
KPI
3
1,378
7
2,921
Male
Female
11
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Chief Executive’s Review
A value-driven business, with
a long term, sustainable focus
2015 UK market and summary
During 2015, the UK housing market
was positive, with high levels of customer
confidence and demand converting into
increased sales and healthy sales price growth.
Despite the uncertainty in the lead up to the
General Election, we saw a very stable and
solid housing market in the first half of the year,
with resilient sales rates and small incremental
increases in house prices. Following the
outcome of the General Election, there was
a more significant improvement in consumer
confidence, and mortgage availability and
cost, which continued into the traditionally
slower summer period. During the year, we
were pleased to see that the tighter lending
requirements, introduced in 2014, continued to
help ensure that monthly payments remained
affordable, aiding the stability of the market.
Overall, we estimate that market led house
price growth was c.6% during 2015.
Whilst there were some regional variations,
we saw a generally positive and steady market
across all geographies. Approximately 6%
of our outlets are located inside the M25
which continues to have strong underlying
fundamentals, particularly at the mid-range level.
We believe that we are currently operating in
the Growth stages of the housing market, with
good accessibility to mortgages for customers
and house price growth at sensible levels. We
are also operating in a short term land market
which has remained benign and disciplined
for a number of years. Looking forward, we
will continue to develop the existing strategy
further and ensure we have the right underlying
business for the future, focusing on the basics
of the business, and, in particular, investment in
our people, product and systems, and
customer service processes.
UK operational performance summary
Against this backdrop, home completions
increased by 7.5% to 13,219 (2014: 12,294),
excluding joint ventures. During 2015, we
delivered 2,509 affordable homes (2014:
2,178), equating to 19% of total completions
(2014: 18%). Our net private reservation rate
for 2015 was 0.73 homes per outlet per week
(2014: 0.64). Cancellation rates remained low
at 12% (2014: 14%). Average selling prices
on private completions increased by 8.5% to
£254k (2014: £234k), benefiting from our focus
on better quality locations. Our overall average
selling price increased by 8.0% to £230k
(2014: £213k).
The Government’s Help to Buy equity loan
scheme remains popular with our customers.
During 2015, approximately 37% of total sales
used the scheme, and we worked with c.5,200
households to take the first step to home
ownership or to move up the housing ladder
(2014: 35% and c.4,400). Approximately 77%
of sales through Help to Buy in 2015 were to
first time buyers (2014: 73%).
We ended the year with a record year end
order book, which increased in value by
27% to £1,779 million as at 31 December
2015 (31 December 2014: £1,397 million),
excluding joint ventures. The increase in
the order book value also benefitted from a
stronger presence in Central London which
has now reached broadly optimal scale.
This order book represents 7,484 homes
(31 December 2014: 6,601 homes).
We ended 2015 with 297 outlets
(31 December 2014: 305) located in high-
quality locations which are supported by
strong demographics. We continue to open
all sites with implementable planning as
efficiently as possible.
Our strategy is differentiated by
a long term focus on value and
on achieving both our financial
and quality objectives sustainably
in a cyclical environment.
Pete Redfern
Chief Executive
12
www.taylorwimpey.co.uk
We continue to monitor and await the full
details of the new Starter Homes initiative,
in order to assess the investment required in
skills and resources to deliver this scheme.
In addition, we will continue to monitor the
debate around the upcoming EU referendum.
As as a business whose customer base and
supply chain is principally in the UK, we
believe the only material risk is around
economic confidence and transition in
the event of an exit.
Group strategy and returns
Our strategy is differentiated by a long term
focus on value and on achieving both our
financial and quality objectives sustainably
in a cyclical environment.
During the five years that we have been
operating to our current strategy, we have
invested heavily in new land at the right time
and in the right locations. This, combined
with our strategic focus to drive increased
conversions from our strategic pipeline, has
grown the scale, quality and future profitability
of our landbank. This approach has enabled
us to deliver record margins and returns to
shareholders, whilst continuing to invest in
the future of the business.
We operate in a cyclical market, and the
positive market conditions have enabled us
to make significant progress towards our
medium term targets and deliver ahead
of our own expectations. We are confident
that our strategy will continue to deliver further
strong progress and remains, more importantly,
an agile framework which can be adapted to
market conditions through the cycle, with
the consistent underpin of a strong set
of simple principles.
This disciplined approach to the
implementation of our strategy has been a
key factor in ensuring our strong progress
against our financial objectives.
In the first year of the medium term targets,
which we set out in May 2014, we are
pleased to report that we have outperformed
our expectations and, against a backdrop of
a more positive housing market, we have met
or exceeded each of these three year targets.
These medium term targets recognise that
we operate in a cyclical environment and offer
visibility of financial performance. The targets,
each of which is applicable for the period of
2015 to 2017, are to achieve on average
the following over the three year period:
• An average operating profit* margin of 20%
• A return on net operating assets** of at least
20% per annum
• An average increase in net assets (including
returns to shareholders)††† of 15% per annum
• An average conversion of at least 65% of
operating profit* into operating cash flow***
We are confident that we will continue to
make progress against these measures in
2016 and 2017.
Further information on our medium term
and long term targets can be found on
pages 16 to 17.
Dividend and cash return policy
Our dividend policy is inherently linked to our
strategy and reflects the cyclical environment
in which we operate. Our policy consists of a
regular maintenance dividend, which is currently
set at 2% of net assets, the top end of our
range of 1-2%, in addition to a return of surplus
cash to shareholders at the appropriate times
in the cycle. A key part of the rationale of
our approach to running the business in a
sustainable way is to give investors a significant,
consistent and reliable dividend stream.
Our 2015 final maintenance dividend of 1.18
pence per share is to be paid on 20 May 2016
to shareholders on the register at the close of
business on 8 April 2016 (2014 final dividend:
1.32 pence per share), subject to shareholder
approval at the 2016 AGM. In combination with
the interim dividend of 0.49 pence per share
(2014 interim dividend: 0.24 pence per share),
this gives a total maintenance dividend for
the year of 1.67 pence per share (2014 total
maintenance dividend: 1.56 pence per share).
On 3 July 2015, we returned £249.6 million to
shareholders, by way of a cash return, equating
to 7.68 pence per ordinary share. As previously
announced on 29 July 2015, we will return
c.£300 million on 15 July 2016, equating to
9.20 pence per ordinary share, to shareholders
on the register at the close of business on
3 June 2016, subject to shareholder
approval at the 2016 AGM.
The Board expects surplus cash returns to
continue to form a significant proportion of the
annual total return to shareholders. These cash
returns will be set on an annual basis, in line
with the cash generation of the business.
Customer service
During 2015, we achieved a customer
satisfaction score of 86% (2014: 87%). We are
disappointed that this has slipped. Delivering
a quality home and service has been more
challenging since 2014 because of the industry
growth and resource shortages. However, we
recognise that we need to continue to do more
in order to meet and exceed our customers’
expectations. Whilst we operate in a cyclical
market, we strongly believe that a customer
centric approach is needed throughout the
cycle. This is a key priority for our business
alongside health and safety.
In 2015 we completed an in-depth review of
every aspect and stage of our Taylor Wimpey
customer experience and Customer Journey,
to identify areas of improvement and to
deliver a better homebuying experience
for our customers. This review included
comprehensive research and extensive
engagement with our customers and
employees. More information can be
found on pages 20 to 21.
During 2015, we began the process of rolling
out our new customer approach across the
business with our focus on three main areas:
our culture, structure and process. As part
of this new approach, we have developed
a customer mindset focused on delivering
proactive, positive and professional service,
which we want to ingrain in our behaviour with
our customers. We have also developed and
will be embedding four customer commitments
in the business, focused on: getting it right first
time, communicating well, keeping promises
and finding solutions.
During the year we have also restructured
our Customer Service teams, strengthening
them with the introduction of a Head of
Customer Service and new Customer
Relations Managers in all of our regional
businesses. The Head of Customer Service
will be part of each regional business’ Senior
Management team to ensure that customer
service remains a top priority. The Customer
Relations Managers will join Customer Support
Managers, coordinators and operatives in
helping us to deliver a better service for our
customers throughout the buying process
and once they have moved into their homes.
Where customer issues arise, we will have the
structure and full capability to deal with them
proactively, positively and professionally.
This will also reduce the customer service
requirements on our site Production teams,
giving them more capacity and time to
concentrate on ensuring that our homes
are built to the highest quality standards.
13
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Chief Executive’s Review continued
The Group Management Team (GMT)
Pete Redfern
Chief Executive
Ryan Mangold
Group Finance Director
James Jordan
Group Legal Director
and Company Secretary
Anne Billson-Ross
Group Human
Resources Director
Jennie Daly
UK Land Director
Responsibilities
As head of the GMT, my
responsibilities include
key strategic and
operational decisions,
sustainability, customer
service and health
and safety.
Responsibilities
Ryan’s role covers
all areas of finance,
including tax, treasury
and managing the
Group’s defined benefit
pension scheme,
as well as information
technology. Ryan also
plays an active part in
our investor relations
programme.
Responsibilities
James is responsible
for our Company
Secretariat department,
as well as overseeing
all legal matters from
plot conveyancing
to landbuying.
Responsibilities
Anne has responsibility
for all areas of human
resources, including
recruitment, benefits,
talent and performance
management.
Responsibilities
Jennie’s role focuses
on our land and
planning strategy,
with responsibility for
and oversight on wider
planning matters. Jennie
is leading our response to
the evolving UK planning
system and oversees our
Sustainability, Technical
and Design, and Land
and Planning teams.
Nigel Holland
Divisional Chairman,
Central and South West
Chris Carney
Divisional Chairman,
London and South East
Fergus McConnell
Divisional Chairman,
North
Ingrid Skinner
Managing Director,
Central London
Lee Bishop
Major Developments
Director
Responsibilities
Nigel oversees our
Central and South
West Division, covering
our East Midlands, South
Midlands, East Anglia,
Oxfordshire, South
Wales, Bristol, Southern
Counties and Exeter
regional businesses and
our Spanish business.
Responsibilities
Chris oversees our
London and South
East Division, which
includes our East
London, North Thames,
South East, South
Thames and West
London regional
businesses.
Responsibilities
Fergus oversees our
North Division, which
covers our East and
West Scotland, North
East, North Yorkshire,
Yorkshire, North West,
Manchester, North
Midlands, Midlands
and West Midlands
regional businesses.
Responsibilities
Ingrid oversees the
Central London regional
business and also
has responsibility
for the integrated
London strategy.
Responsibilities
Lee manages our new
Major Developments
business which has been
specifically created to
secure and project
manage large scale
land opportunities.
More information on
this part of our business
can be found on pages
32 to 33.
View full biographies online at www.taylorwimpey.co.uk/about-us/who-we-are
KPI
14
Integrating sustainability
Being a sustainable business is fundamental
to each aspect of our Business Model and
the long term success of our Company.
To portray a more holistic picture of how we
create value for our stakeholders and of the
external drivers that could impact our Business
Model now and in the medium to long term,
in this year’s report we are implementing a
more integrated approach. As a sustainable
business, we are interlinking reporting on our
financial performance with our non-financial
metrics both within this report, and within our
Sustainability Report, which will be published
on our website in March 2016.
Since we launched our sustainability strategy
in 2013, we have made great progress towards
becoming a more socially, environmentally and
economically sustainable company.
Ultimate executive accountability for
sustainability and climate issues continues
to rest with me as Chief Executive.
Our Sustainability Steering Group (SSG)
coordinates our sustainability activities
at the operational level.
Our Business Model
Since we set out our business strategy in 2011,
Taylor Wimpey has been transformed into a
value-driven, sustainable business, with a long
term focus firmly on generating the best quality
sustainable returns.
Our Business Model is how we deliver our
objectives on a day to day basis. We strongly
believe that having specific and identifiable
objectives as well as a clear business
model creates long term value.
Each component of our Business Model is
important, and in order to achieve our strategic
objectives we constantly work to optimise each
stage, whilst never forgetting that we need to
attract, develop and retain the right people
to deliver this.
As described above, customer service is and
will continue to be a key area of focus for us.
We want to be similarly uncompromising about
customer service as we are about health and
safety. We have therefore moved customer
service into the centre of our Business Model.
Further information on each stage of the
Business Model can be found on pages
18 to 33.
Our people
I would like to take this opportunity to reiterate
Kevin’s words of thanks to the teams and the
individuals across our business. I believe we
have the best people in the industry, and we
want to make Taylor Wimpey the employer
of choice and establish a culture where
individuals from all backgrounds can
reach their full potential.
During 2015 we conducted a survey for all
employees. A total of 55% of employees
(on sites and in offices) took part in the survey
and in a new initiative £5 was donated to their
chosen charity for every survey completed.
Throughout the report, you will see references
to our survey highlights. There were also,
more importantly, areas that the survey
highlighted where we could improve and,
as a Management Team, we will continue
to work towards this in 2016.
In addition to the share scheme take up which
Kevin highlighted, I am also pleased that since
its implementation in 2014, 73 employees have
taken advantage of our enhanced employee
discount scheme of up to 20% subject to
certain criteria when buying a Taylor Wimpey
home. The scheme aims to reward and
encourage long term loyalty of our employees.
During 2015, reflecting the quality of talent and
development within the business, and following
a review of how we structure the future
operational reporting lines of the business,
we were pleased to be able to enhance our
Management Team capability with internal
appointments, ensuring that we are set up to
operate efficiently and effectively for the future.
Following this detailed review, and largely
because of the size and scale of the business
in the South, we divided the South into two
divisions (the Central and South West Division,
and the London and South East Division),
and introduced a third Divisional Chairman
role into the Senior Management structure.
We are now operating within this structure.
The two divisions are led by Nigel Holland
and Chris Carney respectively. Nigel joined
Taylor Wimpey in 1994 and has held various
roles within the Group, most recently as South
West Divisional Managing Director. Chris joined
the business in 2006 as Group Financial
Controller and, following the merger, was
promoted to UK Finance Director. Chris has
been Managing Director of our South Thames
regional business for the last four years. The
North Division remains unchanged under
Fergus McConnell’s leadership as Divisional
Chairman, and Central London remains
under Ingrid Skinner’s leadership as Managing
Director. Jennie Daly, UK Director of Planning,
was promoted to UK Land Director and
joined the GMT during 2015 with significant
industry experience.
More information on each of the members
of the GMT can be found on page 14.
Diversity
We remain committed to the belief that
embracing diversity and inclusion will
enable Taylor Wimpey to succeed through
a workforce that is creative and innovative.
www.taylorwimpey.co.uk
Employee survey highlights
Taylor Wimpey takes health and
safety in the workplace seriously
98%
I believe Taylor Wimpey is committed to
being an ethical and responsible company
97%
I would recommend Taylor Wimpey
as a good place to work to my
friends and family
93%
My line manager is respectful
and always treats me fairly
93%
I am proud to work for Taylor Wimpey
94%
Taylor Wimpey takes action to
reduce its impact on the environment
94%
I am willing to go the extra mile
for my team and Taylor Wimpey
96%
Taylor Wimpey developments
benefit local communities
96%
Note: The percentages are the total of ‘agree’ and
‘strongly agree’ responses. 55% of employees on
site and in our regional offices took part in the survey.
We are pleased that 92% of employees
who took part in the 2015 employee survey
believe that Taylor Wimpey is committed to
becoming a more inclusive organisation
with a diverse workforce.
We have a Senior Management Diversity and
Inclusion Group, which includes members of
the GMT together with other employees from
within the business. During 2015 this working
group has explored current practices in Taylor
Wimpey with a view to enhance them to
continue to meet our commitment in this area.
This has involved a full review of policies and
procedures as well as significant engagement
with a cross section of approximately
250 employees.
15
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Chief Executive’s Review continued
Our Strategy
Our strategy is divided into three components – our vision, our strategic
objectives and our strategic principles. This is underpinned by our
cultural principles and our approach to sustainability. Our strategy
has not changed since we articulated it in 2011 and neither have
our long term strategic financial objectives which were purposefully
set as through the cycle measures.
In May 2014 we announced a set of stretching financial targets for the
period from 2015 to 2017, to challenge the business to deliver more
over the medium term and in positive market conditions. We also
added a fourth measure of cash conversion.
We remain disciplined and focused on the long term, continuing to
target improvement across all measures to deliver the best quality and
sustainable returns for our shareholders. Since we set out this strategy,
we have transformed Taylor Wimpey into a value-driven business.
As we reported last year, following a period of strong investment, we
are now at our optimum range of landbank at c.76k plots, equating
Our vision
Our vision is to be the UK’s leading residential developer for creating value and delivering quality.
Strategic objectives
Long term target
Operating
profit* margin
Earn top quartile
operating profit*
margin
Medium term target
2015-2017
20% average
Progress in 2015
We delivered a record 20.3% operating
profit* margin. During the second half of
2015 we delivered 21.1% operating profit*
margin in the UK.
Return on net
operating
assets**
Deliver at least a
15% return on net
operating assets**
through the
housing cycle
Net asset
growth %
(including
returns to
shareholders)†††
Grow net assets
by 10% per annum
on average through
the housing cycle
(including returns
to shareholders)†††
Cash
conversion
Our strategic principles
• Absolute commitment that a strong margin performance is
the way to drive the best sustainable returns
• Margin underpinned by timing and quality of short term
acquisitions and enhanced by extensive strategic land pipeline
• Continual improvement philosophy with a relentless focus on
adding value to every existing and new site
16
20% return
per annum
We achieved a record 27.1% return on
net operating assets** in 2015, through
increased profitability and asset efficiency.
15% average
increase per
annum
During 2015, we increased net assets
by 19.6%, before cash distributions to
shareholders, increasing the value of our
asset base and investing in high-quality
new land.
Average conversion
of at least 65% of
operating profit*
into operating
cash flow***
We converted 67% of operating profit* into
operating cash flow*** in 2015.
We returned over £308 million to
shareholders in 2015.
• Significant ongoing investment in great quality people and processes
• Increasing focus on asset efficiency and maximising the returns on
our land investments
• Active management of investments and structure over the housing
cycle, to reduce risk and maximise returns over the long term
to c.5.7 years of supply at current completion
levels. We therefore continue to be in a land
replacement position in the short term land
market and, together with the increasing
profitability of the business, are becoming
increasingly cash generative. This has
enabled us to move to a phase focused
on delivery, maximising the returns from our
investments, and continuing to ensure that
the business is optimally positioned to deliver
those returns on a sustainable basis.
Our performance
against strategy
Operating profit* margin (%)
20
10
0
20.3
17.9
20.3%
13.6
2013
2014
2015
Return on net operating assets** (%)
30
15
16.8
27.1
22.5
27.1%
0
2013
2014
2015
Net asset growth††† (%)
19.6
19.6%
14.2
15.8
20
10
0
2013
2014
2015
Cash conversion (%)
70
35
42.3
43.1
67.0
67.0%
0
2013
2014
2015
Note: Definitions can be found in the Group Financial
Review on page 40.
See page 77 for how our
KPI
strategic objectives link to
Directors’ remuneration
www.taylorwimpey.co.uk
In 2015, we delivered record operating results
and returned over £308 million to shareholders
by way of total dividend. Today, Taylor Wimpey
has one of the largest strategic land pipelines in
the sector with c.107k potential plots, together
with a high-quality short term landbank of
c.76k plots.
The success of our strategy over the last five
years, partially helped by a stable and positive
market, has given us the opportunity to focus
on continuously improving our business
processes and systems, including our
customer service, ensuring consistency
across our 24 business units.
Current trading and outlook
The UK housing market remained robust
during late 2015 and has strengthened into
the beginning of 2016. The market continues
to show price growth and very good sales rates
across most geographies. In central London,
the market is stable, with flat prices and sales
rates returning to a more normal level.
The net private sales rate for the year to
date (w/e 21 February 2016) is 0.77 (2015
equivalent period: 0.68). As at 21 February
2016, we are c.50% forward sold for private
completions for 2016 with an excellent total
order book of £2,030 million (2015 equivalent
period: £1,630 million), excluding joint ventures.
We have been successfully operating to
our strategy for five years now, running the
business according to our underlying principles.
During that time we have invested heavily in
land and people development.
Our Business Model is based on our value cycle, each
component of which is important to us to achieve our
strategic objectives.
O p t i m i s i n g v a lue for our stakeholders
d
Selecting la n
Plannin
g a
n
d
e
n
g
a
g
e
m
e
n
t
Sold
Delivering customer service
O
u
r
p
e
o
ple
b uilding basics
H o m e
17
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Annual Report and Accounts 2015
Our Business Model
www.taylorwimpey.co.uk
We create value and deliver quality
across the housing cycle
Our Business Model
O p t i m i s i n g v a lue for our stakeholders
Our Business Model is based on a value cycle and each component of the value cycle is important in
order to achieve our strategic objectives. This is presented at UK level only as most of the metrics do
not apply to our Spanish business.
Focus on customer service
Customer service is and will continue to be a key area of focus for us. We want to be similarly uncompromising about customer service as we
are about health and safety. We have therefore moved customer service into the centre of our Business Model. Our aim is to keep the customer
at the centre of our decisions and coordinate our input to deliver a quality home first time, together with great customer service throughout our
Customer Journey.
Integration of sustainability
Our commitment to sustainability supports our integrated approach in reporting key sustainability information through each part of our Business
Model. This also evidences how we apply our sustainability strategy across the business. Our sustainability strategy sets out a range of strategic
commitments that relate to key social, environmental and economic issues. The strategy works alongside our energy and carbon strategy. Our six
sustainability principles apply to all of our business activities, from identifying land through to completing and handing over our developments.
These can be found within our Sustainability Report 2015.
Delivering customer service
Selecting land
Buying a home is a significant financial and
emotional investment. We aim to make buying,
moving into and living in a Taylor Wimpey
home as easy and enjoyable as possible
for our customers.
Land is the critical ‘raw material’ for our
business and the ability to purchase the right
sites in the right locations at the right price
and at the right point in the cycle is a key
driver of shareholder value.
Managing the planning and
community engagement process
Designing a sustainable community
that meets the needs of local residents, is
attractive to potential customers, and provides
attractive returns for shareholders, requires
a consultative and iterative process of
community engagement.
For more information see pages 20 to 21
KPI
For more information see pages 22 to 23
KPI
For more information see pages 24 to 25
KPI
Getting the homebuilding
basics right
We work with selected subcontractors
and build using carefully sourced materials
to ensure that the homes that we sell are of
a high quality and are built safely, efficiently,
cost-effectively and with minimal impact
on the environment.
Our people
Optimising value
Our employees are our greatest asset.
Having great teams improves our business
success and the retention of high-quality
trained employees is key to achieving
our strategic goals.
Developing sustainable homes and communities
is a time-consuming process, but this provides
us with the opportunity to undertake regular
reviews over the life of each development
to identify potential improvements.
For more information see pages 26 to 29
KPI
For more information see pages 30 to 31
KPI
For more information see pages 32 to 33
KPI
d
Selecting la n
Plannin
g a
n
d
e
n
g
a
g
e
m
e
n
t
Sold
Delivering customer service
O
u
r
p
e
o
ple
b uilding basics
H o m e
Our sustainability strategy
• Our aim is to build homes and communities
that our customers will aspire to and that
enhance the local area
• We are working towards being a more
socially, environmentally and economically
sustainable company
• We aim to balance the long term economic
• We believe that sustainability is
stability and growth of our Company
with our responsibilities to the environment,
society and the economies in which
we operate
fundamental to each aspect of our
value cycle and, therefore, to the long
term success of our Company
• Operating sustainably is both
the right thing to do and brings
significant business benefits
Our cultural principles
• If something is worth doing, it’s worth doing properly
• If we make a mistake, we put it right
• We are competitive and don’t accept second best
• We will not compromise in ensuring that everyone
leaves our sites safe and well
• We behave with integrity, are honest and forthright
and support each other
• We strive to enhance the environment and local
community and to run our business in a way that
is sustainable
• Knowledge and information are key, we take our
decisions on fact not emotion
• We value individuals from diverse backgrounds
and aim to develop potential to the mutual benefit
of the individual and the business
18
19
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Annual Report and Accounts 2015
Our Business Model continued
Delivering customer service
We remain focused on customer service and are committed
to delivering an excellent customer service to all of our customers
at every stage of their journey
What does this mean?
We want to ensure that we always deliver
our homes to the quality standard to which
we aspire and that our service is always
proactive, positive and professional.
Our customer vision is to help our
customers make our houses their homes.
Why is it important?
Whilst we operate in a cyclical market,
we strongly believe that a customer centric
approach is needed throughout the cycle.
We recognise that buying a home is a major
financial and emotional investment and
it is critical that we give our customers
the right experience.
How are we different?
We are now in the process of rolling out
our new customer approach across the
business with our focus on three main
areas: our culture, structure and process.
Our approach
During 2015, we achieved a customer
satisfaction score of 86% (2014: 87%). We are
disappointed that this has slipped. Although
delivering a quality home and service has been
more challenging since 2014 because of the
industry growth and resource shortages, we
recognise that we need to do more in order to
continue to meet and exceed our customers’
expectations. We continue to consider
customer service a key priority for our
business alongside health and safety.
During 2015 we completed an in-depth review
of every aspect and stage of our Customer
Journey, to identify areas of improvement and
to deliver a better homebuying experience
for our customers. Throughout the review,
our focus has been on understanding our
customers’ priorities to enable us to deliver at
and ahead of expectations. This is to ensure
that going forward we deliver the right product,
supported by excellent customer service to all
our customers at every stage of their journey.
What makes us different
Our strong and sustainable
customer base
We have a strong and sustainable customer
base, with over 90% owner-occupiers. First
time buyers accounted for 36% of our
completions (2014: 36%). We continue to
offer a wide range of products to assist first
time buyers. Our prices are set locally and
we use targeted customer incentives, on a
site by site basis, knowing that our customers’
circumstances vary. Investors accounted for
7% of total completions (2014: 8%).
Sales and marketing
Over the years our customers’ communication
preferences have changed, with visits to our
website from mobile devices increasing by
over 100% in 2015. As well as increased
visits, during 2015 our website has proven
very successful in generating c.30% more
telephone calls than in 2014.
During 2015, we reviewed and updated the
40 existing modules of our award-winning
Sales Academy and introduced community
engagement and sustainability modules.
We also continued to develop our
Marketing Academy.
We continue to make improvements to
our online capabilities, including our website
and use of social media such as Facebook,
Twitter and Instagram.
The Government’s Help to Buy equity
loan scheme remains very popular with our
customers. During 2015 approximately 37%
of total sales used the scheme and we worked
with c.5,200 households to take the first step
to home ownership or to move up the housing
ladder (2014: 35% and c.4,400). Approximately
77% of sales through Help to Buy in 2015 were
to first time buyers (2014: 73%).
Customer service review
We want to ensure that we always deliver
our homes to the quality standard to which we
aspire and that our service is always proactive,
positive and professional. As previously
mentioned, we have now completed an
in-depth review of every aspect and stage
of our Taylor Wimpey customer experience
and Customer Journey, to identify areas
of improvement and to deliver a better
homebuying experience for our customers.
This review included comprehensive research
and extensive engagement with our customers
and employees. Approximately 600 of our
customers from across the UK took part
in the research.
Following the review, we are now in the
process of rolling out our new customer
approach across the business with our
focus on three main areas: our culture,
structure and process, which are explained
in more detail on page 21. As part of this new
approach, we have developed four customer
commitments (as set out below) and a
customer mindset – focused on delivering
proactive, positive and professional service –
which we want to ingrain in our behaviour with
our customers.
Four Taylor Wimpey
customer commitments
1. Right first time
2. Communicate well
3. Keep promises
4. Find solutions
www.taylorwimpey.co.uk
Our Lyde Green ‘Glass House’ show home
in Bristol won Best Marketing Initiative in the
Housebuilder Awards 2015. The four bedroom
show home features a fully glassed front so
visitors can take a look inside without even
stepping through the door. We believe that this
is the only show home of its kind in the country.
We also won a Silver Award in the Best Use
of Digital in the Property Sector category at the
2015 Digital Impact Awards for the pioneering
technology used in the show home at our
Chobham Manor development in Stratford,
London.
Best Marketing
Initiative
Our KPIs
Customer satisfaction
Objective
We strive to maintain and improve our
customer satisfaction scores at 90% or above.
KPI
Definition
Percentage of customers satisfied or very
satisfied with the quality of their new home as
measured by the National New Homes survey
undertaken by the NHBC on behalf of the HBF
eight weeks after legal completion.
Why is it key to our strategy?
Delivering high levels of customer satisfaction
enhances the reputation of our business and
reduces the costs associated with rectifying
poor-quality work.
Our progress in 2015
• Completed an in-depth review of every
aspect and stage of our Customer
Journey
• Restructured our Customer Service teams
• Introduced a new mindset and four
customer commitments
• Developed and started to implement new
training for our Customer Service teams
• Reviewed and updated the 40 existing
modules of our Sales Academy and
introduced community engagement
and sustainability modules
Our priorities for 2016
• Continue to roll out our new customer
approach across the business
• We will strive to improve our customer
satisfaction scores
• Continue to implement training for all
100
our customer facing employees
• Launch our new Marketing Academy
90%
87%
86%
50
0
2013
2014
2015
Award winning show homes
Our strategy in action
Our culture
Regardless of the role that any Taylor
Wimpey employee fulfils in the business, we all
contribute to the final result for our customers.
Across our business operations, we want our
employees to adopt our customer centric
culture and to understand the important role
they play with our customers. Our aim is
to keep our customer at the centre of our
decisions and coordinate our input to deliver
a quality home first time, with great service
throughout our Customer Journey. This will
help our customers to settle in quickly and
make our houses their homes.
During 2015 we developed and started
to implement a training programme to
equip those employees interacting with
our customers with the right skills to deliver
a consistently great service.
Our structure and process
During 2015 we restructured our Customer
Service teams, strengthening them with the
introduction of a Head of Customer Service
and new Customer Relations Managers roles
in all of our regional businesses. The Head of
Customer Service will be part of each regional
business’ Senior Management team to ensure
that customer service remains a top priority.
Customer Relations Managers will be based
at site locations and will deliver key functional
aspects of our new and improved Customer
Journey; most notably our relaunched quality
assurance process, which will scrutinise and
ensure the high standard of quality we expect
in our product delivery. This will also reduce
the customer service requirements on our site
Production teams, giving them more capacity
and time to concentrate on ensuring that
our homes are built to the highest
quality standards.
More information on all these areas can
be found in our Sustainability Report 2015.
20
Sold
21
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Our Business Model continued
Selecting land
We believe that the strength and quality of our landbank
is one of the key differentiators for Taylor Wimpey
What does this mean?
Good quality land with planning is the
critical ‘raw material’ for our business.
Strategic pipeline is any land without
residential planning consent.
Why is it important?
The value we create for our shareholders,
communities and customers all starts with
land and it is the area we add most value,
through planning, allowing us to generate
the best quality returns. Land is a scarce
resource and we want to make the best
use of what is available, select the right
sites and transform them into vibrant and
thriving communities.
How are we different?
Our investment and scale is based on
our view of land quality and capital risk
in a cyclical market. We are focused on
selecting the right land and developing it in
a sustainable manner. We have one of the
largest strategic land pipelines in the sector
with c.107k potential plots. With the benefit
of this, and having reached our optimum
range of short term landbank, we have an
extremely selective and targeted approach
to land investment. This allows us to focus
on where we can add value and maximise
our returns.
Our approach
We are highly selective with regard to the
types of sites that we buy, focusing on the
quality of the land rather than the number of
plots acquired. We employ dedicated Land
teams in each of our 24 regional businesses,
who use their expertise and local knowledge
to identify potential high-quality, sustainable
sites. Our landbank is broadly spread across
the country in targeted quality locations,
supported by strong demographics and
economics, in the villages, towns and
cities where people want to live.
Good quality land with planning is the critical
‘raw material’ for our business – investing at the
right time in the right location and enhancing
and realising the value of our investments
through effective planning is key, in all market
environments. We believe that the strength
and quality of our landbank is one of the
key differentiators for Taylor Wimpey.
The changes to planning policy over the
last five years have resulted in an improved
environment, however we recognise that we
have not seen the full benefits flow through
into the planning system yet.
What makes us different
Short term land market opportunities
We are within the optimum range of our short
term landbank at c.76k plots. This equates
to c.5.7 years of supply at current completion
levels and is broadly spread across the country
in targeted high-quality locations, supported
by strong demographics and economics.
We therefore have an extremely selective and
targeted approach to further land investment,
which is broadly at replacement level in
the short term land market. This is focused
on where we can add value and seek to
maximise the returns from our investments,
while continuing to ensure that the business is
optimally positioned to deliver those returns on
a sustainable basis. The average selling price
in the UK short term owned landbank in 2015
increased by 10.4% to £245k (2014: £222k),
driven by the quality of additions and the
improvement in the housing market.
The average life cycle of a site is approximately
five years, which makes it critically important
that we continue to assess the capital lock-up
on a regional and Group basis. The short term
land market remained disciplined throughout
2015, enabling us to continue to source
and invest in short term value-creating
land opportunities at investment operating
profit* margins of around 20% and a return
on capital employed in excess of 27%.
In 2015 we acquired 6,971 plots in the
short term land market (2014: 8,315 plots).
Strategic pipeline in place for
long term success
The quality of our short term landbank is
supported by the strategic pipeline and is
realised as we convert potential plots with
no residential planning into the short term
landbank with planning. The strategic pipeline
enables us to optimise our cash flows and
underpins our profitability, providing a source
of land supply at enhanced margins. In order to
enhance the value of our strategic land pipeline,
our regional businesses and Strategic Land
teams work together to achieve planning
consents on our strategic land sites that
align with the detailed design and delivery
requirements of the local area and business.
We have one of the largest strategic pipelines
in the sector which stands at c.107k potential
plots (31 December 2014: c.110k potential
plots), enhanced by our strong reputation and
long history of working with land vendors and
local communities to progress land through the
planning system. During 2015, we converted a
further 8,660 plots from the strategic pipeline to
the short term landbank (2014: 10,779 plots),
significantly in excess of our medium term
conversion target of c.6,000 plots per annum.
This provides us with increased choices and
opportunities. We continue to invest in new
opportunities, and in 2015 we added a net
5.8k new potential plots to the strategic
pipeline (2014: 10.4k). In 2015, a record 47%
of our completions were sourced from the
strategic pipeline (2014: 39%). Our aim is to
sustain completions from the strategic pipeline
of over 40% per annum in the medium term.
Sustainability
We have guidance for employees on our
approach to sustainable development to
ensure consistency across our 24
regional businesses.
www.taylorwimpey.co.uk
A major urban extension
Great Western Park is a new community which
is supporting the sustainable growth of Didcot.
Our Strategic Land and Planning team carried
out the initial land assembly (bringing together
different pieces of land) and bought the site.
They then worked to secure outline planning
consent, including the negotiation of a
complicated Section 106 planning agreement.
The masterplan for this 3,000-home
development is divided into three character
areas and includes 62 hectares of both
‘natural’ and formally landscaped open space.
3,000 homes
Our progress in 2015
• We are within the optimum range of our
short term landbank at c.76k plots
• Converted 8,660 plots from the strategic
pipeline to the short term landbank
• Added net c.5.8k new potential
plots to the strategic pipeline, which
stood at c.107k potential plots as
at 31 December 2015
• 47% of 2015 completions were
sourced from the strategic land
pipeline (2014: 39%)
Our priorities for 2016
• Continue to work with land vendors,
communities and local authorities to
convert land from the strategic pipeline
into the short term landbank
• Continue to focus on selecting the
right land and developing it in a
sustainable manner
Our KPIs
Strategically sourced completions
Owned and controlled plots with planning
Objective
We aim to source more than 40% of our
completions from the strategic pipeline
per annum in the medium term.
KPI
Objective
We aim to maintain sufficient land in our
portfolio to enable us to remain selective
in future purchases.
KPI
Definition
Number of completions which originally did not
have planning permission when we acquired
a commercial interest in them, expressed as
a percentage of total completions.
Why is it key to our strategy?
The strategic pipeline enhances our ability to
increase the contribution per legal completion
because of the inherent margin uplift from
strategic plots. It also allows us to take
a long term view of sites.
Definition
The total number of plots that we either own
or control, with some form of planning consent.
Why is it key to our strategy?
We operate in a planning constrained
environment. Having a portfolio of land in
place is key to planning the required scale
of our building operations for future home
completions. It enables us to be selective
in land purchases.
50
25
29%
47%
39%
6
3
1
,
5
7
0
1
7
,
5
7
8
2
6
,
0
7
80,000
40,000
0
2013
2014
2015
0
2013
2014
2015
22
23
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Our Business Model continued
Managing the planning and
community engagement process
We aim to be the industry leader in managing the planning
and community engagement process
Engagement with schools
What does this mean?
We aim to be the industry leader in all
aspects of planning and to obtain the right
planning consents that enable us to respond
to a changing market, reflect the desires of
our customer base and deliver the quality
homes we want to build, whilst meeting
our financial objectives.
Why is it important?
We believe that local communities should
have a say in development. This enables us
to achieve the right planning permission and
ensure our developments are valued by their
local communities.
How are we different?
We actively seek the views of local
communities and other stakeholders. We
develop a tailored planning and community
engagement strategy for each site and work
closely with communities and other local
stakeholders throughout all aspects of the
planning process. We believe that we have
a responsibility to contribute to our local
communities and that this responsibility
grows with our success. In 2015 we
contributed over £335 million via planning
obligations.
Our approach
Whilst we have a national presence, we
operate as a very local homebuilder with 24
regional businesses across the country. We
are committed to working with local people
and stakeholders throughout the planning
process and seek to engage, consult and
work in partnership with communities and all
interested stakeholders both before we submit
a planning application and during the life cycle
of the site. In this way we can listen to their
concerns and, where possible, incorporate
these within our plans.
We believe that a positive and structured
approach to working with others is at the
heart of a successful scheme. We work in
partnership with the communities in which
we build to deliver homes that meet their
requirements and aspirations.
During 2015 we worked with communities,
planners and landowners to convert a further
8,660 plots from the strategic pipeline.
What makes us different
Serving our communities
We work with communities and our
partners to create well designed, sustainable
neighbourhoods where our customers want
to live, grow and thrive and which are valued
by our local communities.
We are pleased that 96% of employees
who responded to the 2015 employee
survey agree that Taylor Wimpey benefits local
communities. In 2015, we contributed over
£335 million to local communities in which we
build across the UK via planning obligations,
providing local infrastructure, affordable homes,
public transport and education facilities
(2014: £300 million).
Stakeholder engagement
We undertake tailored, development specific
engagement with local communities on each
and every one of our UK sites. We introduced
a comprehensive community engagement
framework in 2011 and have been regularly
improving and updating it since. We are proud
of our approach to community engagement
and the way that our employees deliver it.
The framework applies to every stage of the
development timeline, from pre-planning
consultation to ongoing communication
with existing and new residents during
and after construction.
During 2015 we developed guidance on
Building Our Reputation, which advises
employees on communicating with local
communities and customers throughout the
lifetime of our developments. Transparency is
an essential part of community engagement,
and we want local communities to know
what we are doing and why we are doing
it, as well as how they can express an
opinion or get involved.
Meeting the neighbours
We design and build our developments so
that they can become thriving and vibrant
communities where people enjoy living.
Our engagement with customers continues
when they have moved in and we regularly
host events to help build community spirit.
For example, we held a ‘Meet Your
Neighbour’ event at our Forge Wood
development in Crawley in 2015. We
provided a barbecue and children’s
entertainment so our new residents could
get to know each other and start to turn
our development into a true community.
Our progress in 2015
• Continued to embed our comprehensive
community engagement framework
• Launched an economic benefits toolkit
for use during consultation
• Continued to undertake social media
engagement trials
• Distributed curriculum packs to 130
schools across the UK to help our
regional businesses to engage with
local pupils and their parents
• Our ‘Taylor Wimpey Schools Initiative’
was Highly Commended in the Best
Community Initiative category at the
Housebuilder Awards 2015
Our priorities for 2016
• Continue to maintain best practice
community engagement
• Embed our Building Our Reputation
employee guidance
• Continue to investigate ways to engage
with a wider and more diverse range of
people within local communities
Planning is fundamental to the success of
our business and we aim to progress sites
through the planning process to enable us
to develop our sites as efficiently as possible.
We support the Government’s Localism Act
and work closely with local authorities and
communities throughout the planning process
and beyond. We aim to create development
proposals that are financially viable, benefit the
local community and provide the housing that
is needed. As outlined on page 22, we believe
that changes to planning policy over the
last five years have resulted in an improved
environment, however we recognise that
we have not seen the full benefits flow
through into the planning system yet.
Online engagement
Our Taylor Wimpey website includes pages for
all of our proposed developments throughout
the UK. We have continued to develop and
improve the functionality and content of
these pages in 2015.
We are committed to publishing information
on proposed developments online so that
members of local communities and other
interested parties can easily find out what we
are planning and where. We would like people
to register their interest so we can update
them on progress. Above all, we want wider
and more diverse groups and individuals to
get involved and tell us their views, whether
positive or negative. Moving forward, we
will continue to investigate digital aspects
of community engagement.
During 2015, we continued to undertake social
media trials in community engagement to
understand how social media could contribute
to our community engagement process.
www.taylorwimpey.co.uk
We regularly engage with schools located close
to our developments, raising awareness of the
dangers of live construction sites and giving
schoolchildren an opportunity to learn about
the housebuilding process.
We have developed curriculum packs to
provide our regional businesses with a range
of interesting and interactive projects they can
use with schools throughout the different
stages of our engagement process.
These educational resource packs have been
distributed to over 130 schools throughout
the UK and are available to any school.
130 schools
Our KPIs
Conversion of strategic pipeline
Objective
We aim to convert on average c.6k plots
per annum in the medium term.
KPI
Definition
Number of plots, which originally did not
have planning permission when we took a
commercial interest in the land, which we have
promoted through the planning process and
achieved some form of planning on. In this way
we convert potential plots from the strategic
pipeline to plots in the short term landbank.
Why is it key to our strategy?
The strength of our strategic pipeline (plots
without residential planning consent) is a key
differentiator and enables us to be extremely
selective in the short term land market and
also reduces the pressure on the teams. We
work with landowners, local authorities and
communities to promote the strategic pipeline
through the planning process and achieve
planning permission.
12,000
6,000
9
7
7
,
0
1
0
1
2
,
9
0
6
6
,
8
0
2013
2014
2015
24
25
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Our Business Model continued
Getting the homebuilding basics right
Getting the basics right means effective processes
are consistently applied across all our regional businesses
What does this mean?
We work with selected subcontractors and
build using carefully sourced materials to
ensure that the homes that we sell are of
a high quality and are built safely, efficiently,
cost-effectively and with minimal impact
on the environment.
Why is it important?
There is nothing more important to us
than providing a safe place in which our
employees and subcontractors can work.
We are also committed to high standards of
environmental management. The building
process is carefully managed by our
site-based and regional Production teams
to ensure quality, minimise disruption to
residents in the surrounding areas, and to
protect and enhance the value of each site.
How are we different?
We believe that quality objectives matter
as much as financial objectives. Operating
sustainably is both the right thing to do
and makes good business sense.
Our approach
The health and safety of individuals on our
sites is, and will remain, our non-negotiable
top priority. We are committed to providing
a safe place in which our employees and
subcontractors can work and our customers
can live. We will not compromise in ensuring
that everyone leaves our sites safe and well.
We have a comprehensive Health, Safety
and Environmental (HSE) Strategy and a fully
integrated HSE management system in place
which is regularly reviewed at all levels. Our
commitment to health and safety was reflected
in our 2015 employee survey which
found that 98% of our staff who took part
believe that Taylor Wimpey takes health
and safety seriously.
We believe that sustainability is fundamental to
each aspect of our Business Model and value
cycle and, therefore, to the long term success
of our business. Operating sustainably is both
the right thing to do and makes good business
sense. We aim to balance the long term
economic stability and growth of the Company
with our responsibilities to the environment,
society and the local economies in which
we operate.
We strive to be an open, transparent and
responsive company for all our stakeholders
and to work with them to understand and
address the wider social, economic and
environmental impacts resulting from our
operations. We are particularly pleased that,
based on our employee survey, 97% of
respondents believe that Taylor Wimpey
is committed to being an ethical and
responsible company.
We are committed to high standards of
environmental management. The building
process is carefully managed by our site
based and regional Production teams to ensure
quality, minimise disruption to residents in the
surrounding areas, and to protect and enhance
the value of each site.
What makes us different
We do not compromise on health
and safety
We have continued to keep our Annual Injury
Incidence Rate (AIIR) for reportable injuries low
at 175 per 100,000 employees and contractors
in 2015, a 16.3% reduction on our 2014 AIIR
(2014: 209). Our AIIR compares favourably with
the Home Builders Federation’s Home Builder
Average AIIR of 361 for 2014/15 and the
Health and Safety Executive’s Construction
Industry Average AIIR of 421 for 2014/15.
We reduced our AIIR for major injuries per
100,000 employees and contractors from
26 in 2014 to 18 in 2015.
We continue to engage extensively with
contractors and operatives on health and
safety, working in partnership with them to find
safer ways of carrying out their tasks on site.
During 2015 we introduced stages two and
three of The Operative’s Journey, a major new
HSE Theme Initiative that we launched in 2014.
The overall initiative is aimed at improving
how we communicate the health and safety
message to our supply chain and those that
work on our sites and how we can gain the
help of our partnering contractors to share
ownership for maintaining a safe site.
Quality product range
We build homes that people want to live in.
We are proud of the homes we build and
the communities we create. Our focus is
on providing high-quality, well-designed,
sustainable homes and communities that meet
the needs and aspirations of local residents.
Our mix of homes is informed by the local area.
We continue to offer a wide range of homes
from apartments to five bedroom houses, with
prices ranging from under £100k to over £3m.
In 2015, the proportion of apartments in our
private completions was 13% (2014: 18%).
The average square footage of our private
completions also increased slightly to 1,072
square feet (2014: 1,042 square feet).
During 2015, Taylor Wimpey once again
delivered an excellent performance in the
National House-Building Council’s (NHBC)
Pride in the Job Awards 2015, with 63 of our
www.taylorwimpey.co.uk
Award winning development
Our Cranbrook development in East Devon
was named Best Overall Development as
well as winner of the Affordable Housing
category at the Inside Housing Magazine’s
Top 60 Awards.
The awards celebrate success and
innovation in delivering new homes and
looks at achievement in 10 key areas,
from design to sustainability.
Best Overall
Development
Site Managers awarded Quality Awards (2014:
70), 20 Seals of Excellence (2014: 23) and three
being named Regional Winners (2014: five).
More information can be found in our case
study on page 31.
Our standard house plan range, which is
used on over 70% of our sites, offers many
advantages, including efficient procurement
opportunities, quality of design, and build and
cost control within the regulatory framework.
We continually review our product offering
to ensure we are able to reflect our customers’
lifestyles and expectations. During 2015, we
launched a detailed review of our standard
specification across the full range.
Looking longer term, we have commissioned
a major long term initiative, working with a
range of stakeholders including customers
and suppliers, to explore and evaluate trends,
changes and new innovations in design,
architecture, technology, materials and
methodology with the aim of shaping,
designing and future-proofing our product
range. More information can be found in
our case study on page 29.
Build costs and efficiency
Our scale affords us the benefit of strong
purchasing power and we achieve significant
cost savings across our regional businesses
with national agreements with a number
of suppliers.
During 2015, the improved market resulted
in underlying build cost increases (excluding
house type mix impact) of c.5% (2014: c.5%).
This was weighted towards labour, with
materials largely keeping pace with the
growth of the industry. Looking forward,
material pricing remains broadly flat and we
have seen a reduced rate of inflation on labour
pricing. We anticipate underlying build costs
will increase by 3-4% in 2016.
Taylor Wimpey Logistics plays an important
part in our supply chain management,
particularly in the current environment,
providing us with an alternative route to delivery
and aiding efficiency with the preparation of
‘just in time’ build packs for each stage of the
building process. More information on this part
of our business can be found on our website.
Our contributions to the environment
We strive to keep any adverse effects that our
activities may have on local environments and
communities, such as pollution and ecological
damage, to a minimum and to make a positive
contribution to the environment of the areas
we build in.
We acknowledge the global threat of climate
change and are committed to reducing our
emissions, energy use and waste and
reviewing water use. In 2015 we reduced
scope 1 and 2 carbon emissions intensity
by 7.8%, supported by our energy reduction
programmes in place in our offices, on our
sites and within our show homes and sales
areas. Further information can be found on
pages 28 to 29, together with our Global
Greenhouse Gas emissions data.
We have improved our UK net operating asset
turn†* to 1.34 times (2014: 1.29 times) and
routinely consider opportunities on sites which
we already own to assess possible ways of
bringing forward the delivery of much needed
new homes. More information on this can be
found on pages 32 to 33.
We implemented a new specification
for site compounds in 2014 which means
that all of our new site compounds are now
highly energy-efficient. We also launched a
programme of retrofitting appropriate existing
compounds and retrofitted 169 compounds
in 2015.
We build much more than homes
Our operations add significant additional value
to the communities in which we build. For
example, through job creation, improvements
to local environments and infrastructure, as well
as contributions to education and community
facilities, creating sustainable and vibrant
communities. More information can be
found on pages 24 to 25.
We have a comprehensive Waste and
Resource Strategy and Action Plan for our
housing operations and our supply chain. We
focus on seeing materials as resources, using
them more efficiently through design and on
site recovery, and keeping generated waste
to a minimum.
26
27
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Our Business Model continued
Getting the homebuilding basics right continued
During 2015 our construction waste
increased to 4.78 tonnes per 100 square
metres of completed build (2014: 4.58 tonnes).
Our previous research indicated that nationally
there has been upward pressure on waste
generation figures, however we have continued
our internal investigation on what is happening
across our industry and within Taylor Wimpey.
Environmentally sustainable homes
New homes are considerably more
energy-efficient than older housing stock
and we are committed to building increasingly
energy-efficient homes in line with Government
policy and Building Regulations. Our ‘fabric
first’ approach to energy efficiency, which
concentrates on highly insulated walls and
windows, helps owners to save energy
and money.
Global Greenhouse Gas emissions (GHG)
We continue to take steps to improve
our approach to climate change mitigation,
adaptation and transparency. Data is provided
as tonnes of carbon dioxide equivalent (CO2e)
and covers all of our operations including our
sites, offices, business travel, as a result of
waste disposal and throughout our supply
chains. Our 2015 scope 1 and 2 data has
been externally verified by the Carbon Trust.
Further information can be found within our
Sustainability Report 2015
KPI
Our progress in 2015
• We have continued to keep our AIIR for
reportable injuries low
• Made progress on our energy reduction
programme on sites, offices and in
sales areas
• Our scope 1 and 2 carbon emissions
intensity reduced by 7.8% in 2015
• Reviewed internal processes with regard
to flood risk and undertook a water audit
and biodiversity review
• Continued to review biodiversity practices
and started to develop a tool to measure
biodiversity performance on sites
• Launched a detailed review of our
standard specification across the
full range
Our priorities for 2016
• Improve or, as a minimum, maintain
the same AIIR as achieved in 2015
• Continue to embed The Operative’s
Journey, our HSE Theme Initiative
• Continue with our detailed review of
our standard specification
• Reduce our mains water consumption
from our metered UK offices by 6%
per full time employee
• Continue to progress towards our carbon
intensity reduction target of 25% by 2018
• Develop and implement action plans for
reducing construction waste
Our KPIs
Health and safety
Objective
We are committed to providing a safe place
in which our employees and subcontractors
can work and our customers can live.
KPI
Definition
Reportable (all reportable) injury frequency
rate per 100,000 employees and contractors
(Annual Injury Incidence Rate).
Why is it key to our strategy?
Health and safety is our non-negotiable
top priority. As well as having a moral duty to
maintain safety on site, accidents and injuries
can have a detrimental impact on the business
through additional costs, delays and / or
reputational damage.
207
209
175
220
110
0
2013
2014
2015
Research and development
We have commissioned a long term initiative –
Project 2020 – to explore and evaluate trends,
changes and new innovations in design,
architecture, technology, materials and
methodology in the housebuilding industry
with the aim of shaping, designing and future-
proofing our product range for 2020 and beyond
– fully reflecting our customers’ lifestyles and
expectations. As part of this project, we are
engaging with a well-known organisations such
as BRE, RIBA and the Zero Carbon Hub as well
as our customers, academics, suppliers, industry
and research bodies to look at workstreams
such as product design, customer demographics,
alternative build methodologies, new technologies
and build materials, supply chain and more.
Future-proofing
our product
Sustainability reporting recognition
Taylor Wimpey continues to be a constituent
of the Dow Jones Sustainability Europe
Index and the FTSE4Good Index Series.
We participate annually in CDP (the Carbon
Disclosure Project) and received a score
of 97% / D in 2015 (2014: 88% / C).
Greenhouse Gas (GHG) emissions for period
1 January to 31 December
Category total emissions (tonnes CO2e)
Emissions from combustion of fuel (scope 1)
17,769
2015
Emissions from electricity, heat, steam and
cooling purchased for own use (scope 2)
(location-based method)a
Total scope 1 and 2 emissions
Emissions Intensity: Emissions per
100 sqm of completed homes
Percentage reduction in direct carbon
emissions intensity (scope 1 and 2)
11,159
28,928
2.26
7.8%
www.taylorwimpey.co.uk
2014
16,436
11,885
28,322
2.45
1.2%
2013
16,177
10,526
26,703
2.48
#b
(a) 2015 scope 2 emissions (market-based method): 12,947 tonnes CO2e: see our Carbon Reporting Methodology
Statement at www.taylorwimpey.com/corporate/sustainability for calculations for market-based methodology.
(b) Not available due to using a new emissions measurement methodology in 2013 due to the introduction of
Mandatory Carbon Reporting. This means that 2013 data is not entirely comparable to previous years.
Methodology
We have used the GHG Protocol Corporate Accounting and Reporting Standard (revised edition), data gathered to
fulfil our requirements under the Mandatory Carbon Reporting (MCR) requirements, and emission factors from the
Government’s GHG Conversion Factors for our corporate reporting.
We have reported on the emissions sources required under the Companies Act 2006 (Strategic Report and Directors’
Reports) Regulations 2013 apart from the exclusions noted. The reported sources fall within our Consolidated Financial
Statements and are for emissions over which we have financial control. We do not have responsibility for any emissions
sources that are not included in our consolidated statement.
The following sources of emissions were excluded or part-excluded from this report:
• Fugitive emissions (refrigerant gases): excluded on the basis of expected immateriality and difficulty in acquiring data
• Gas and electricity of part-exchange properties: excluded on the basis of immateriality due to very few completions
of this type
• Certain joint venture properties: where Taylor Wimpey was not part of the handover process. In these cases other
housebuilders have captured MCR-related data
• CHP / District Heating Systems: In most cases Taylor Wimpey pays for the output fuels supplied to plots and therefore
we have reported these. In most cases Taylor Wimpey does not pay for the input fuel and as a result we have not
reported on these supplies
28
29
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Our Business Model continued
Our people
We aim to be the employer of choice in the housebuilding industry
What does this mean?
We want to attract and retain the best
people and treat them fairly and with respect.
Why is it important?
Our people are our greatest asset and are
a competitive advantage that cannot be
easily or quickly replicated. We believe that
having the right people with the right skills
at all levels in our organisation is critical to
building a quality, sustainable business
and delivering our strategy.
How are we different?
We have consistently invested in our people
through traineeships, apprenticeships and
our graduate programme. During 2015, we
developed a new strategic approach to our
human resources and have further improved
our approach to talent, succession,
resourcing and reward, as well as
learning and development.
Our approach
We aim to be the employer of choice in the
housebuilding industry, attracting and retaining
the best people to establish a culture that gives
individuals the opportunity and support to
develop to their full potential, regardless of
market conditions.
We will continue to seek a balance of internal
and external appointments, in order to combine
career development with the introduction of
new perspectives and innovative approaches.
As previously set out on page 15, in 2015
we reviewed the operational structure of the
business and future operational reporting
lines, which resulted in some changes and
enhancements in the GMT.
Following this, and reflecting the size and scale
of the business in the South, we separated the
South into two divisions (the Central and South
West Division, and the London and South East
Division) and we are now operating within this
management structure.
During 2015, we continued our review of all
aspects of our human resources strategy and
engaged extensively with different areas of the
business, to ensure our employee proposition
is attractive and, therefore, helps to retain our
employees whilst at the same time encouraging
them to go the extra mile for our customers,
now and into the future. This is also particularly
important in a competitive climate.
What makes us different
Our people matter
Our people are one of our greatest competitive
advantages. We fundamentally believe that
having the right people with the right skills at
all levels in our organisation is critical to building
a quality, sustainable business and delivering
our strategy.
During 2015 we directly employed, on average,
4,299 people across the UK. In an increasingly
competitive market, we are pleased that our
voluntary employee turnover rate remained
low, relative to history, at 13.3% during 2015
(2014: 13.6%).
Investing in our people
We believe that building a pipeline of talent is
key. Through our learning and development
initiatives, aimed at growing talent from within,
we give our employees the opportunities and
skills to become our future business leaders
and develop their careers with Taylor Wimpey.
During 2015, we recruited 98 apprentices
(including 29 site management apprentices),
22 management trainees and 19 graduates,
whilst improving our apprenticeship and
trainee schemes across a number of areas
(2014 total: 168).
Following the continuing success of our
Sales Academy model, we have designed
a Production Academy for launch in 2016 to
give our employees a clear career path to site
management through a structured programme
that will develop their technical expertise.
We plan to expand this academy model to
commercial and land and planning disciplines
in the future.
At Taylor Wimpey, we strive to treat our
employees fairly and with respect. During
2015 we continued to focus on diversity and
inclusion through our Senior Management
working party and, according to our employee
survey, 92% of respondents believe that Taylor
Wimpey is committed to becoming a more
inclusive organisation with a diverse workforce.
We believe that employee share ownership
is important. We are pleased that over 50%
of all eligible employees participated in the
Company’s all-employee share schemes or
held shares of the Company during 2015
and we plan to extend this eligibility further.
Supporting disability in the workplace
During 2015 we worked with the Leonard
Cheshire Disability Change100 programme,
a work placement and mentoring initiative to
kickstart the careers of talented university
students and recent graduates. Three
university students undertook 100-day paid
work placements with us. Feedback from
the graduates has been extremely positive
with all of them confirming they would
recommend us to future students for a
placement. We learned a great deal from
these very successful placements and look
forward to continuing our participation in
the programme in 2016.
Pride in the Job Awards
In 2015 63 of our Site Managers received
Quality Awards in the NHBC’s annual Pride
in the Job Awards 2015.
A further 20 also achieved a Seal of
Excellence Award and three of them were
named Regional Winners. These were Steve
Cole from our East Anglia regional business,
Andy Shaw from our Midlands regional
business and Rob Mitchell from our
North East regional business.
63 Quality
Awards
Since its implementation in 2014, 73
employees have taken advantage of our
enhanced employee discount scheme of up
to 20% subject to certain criteria when buying
a Taylor Wimpey home. The scheme aims to
reward and encourage long term loyalty of
our employees.
Employee engagement
We are committed to really understanding
what our employees think we do well, what
we could improve upon and how likely they
are to stay with the business. We undertook
an employee survey called Talkback in 2015.
This survey enabled us to measure how
engaged our employees are and take action
where necessary to ensure our employee
proposition really reflects our company culture.
We will continue to conduct annual employee
surveys for the foreseeable future. More
information on this, including key highlights
can be found on page 15.
Human rights
We support the United Nations’ Universal
Declaration of Human Rights and have policies
and processes in place to ensure that we act
in accordance with our cultural values which
encompass areas such as business conduct,
equal opportunities, anti-corruption and
whistleblowing. We do not consider this
a material issue in our business.
www.taylorwimpey.co.uk
Our progress in 2015
• Continued our review of all aspects of
human resources and the employee
proposition
• Continued to focus on diversity
and inclusion
• Further improved our approach to talent,
succession, resourcing and reward, as
well as learning and development
• Continued to develop our approach
to learning and development for our
production and technical employees
Our priorities for 2016
• Produce a diversity and inclusion strategy
and action plans
• Continue to develop our new talent and
succession process and competency
framework
• Review our apprentice and management
trainee programmes
• Continue to improve employee benefits
Our KPIs
Employee turnover
Objective
We aim to attract and retain the best people
in the industry and give them opportunities
to develop to their full potential.
KPI
Definition
Voluntary resignations divided by number
of total employees.
Why is it key to our strategy?
Our employees are one of our greatest
competitive advantages and they are crucial
to executing the strategy. We aim to keep
this within a range of 5-15%.
20
10
13.6%
13.3%
0
2014
2015
30
31
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Our Business Model continued
Optimising value
We look to optimise the value of each site not only during the
initial acquisition process, but throughout the planning and
development stages so that the original value is not only
protected but enhanced
What does this mean?
This approach covers everything we do
from enhancing value on our sites through
cost savings or better planning through to
ensuring we are adding value to the charities
we support and our wider partnerships.
Why is it important?
The discipline of continually reviewing
and challenging ourselves to do more,
ensures we do more than simply protect
the business, we enhance the value.
How are we different?
We have a relentless focus on value at every
stage of our Business Model and this is
ingrained into the Taylor Wimpey mindset.
We also balance our desire to improve
quality with a focus on making our assets
work harder for us and our stakeholders.
Our approach
We achieve this optimisation of value by
undertaking a series of thorough reviews of
each site at all stages of its life cycle, using our
value improvement and tracking processes to
ensure that we are continually optimising and
delivering the value within our land portfolio.
What makes us different
Capturing value
Our ability to constantly increase efficiency
and tightly control costs is part of the Taylor
Wimpey culture and remains central to
delivering enhanced returns. This extends
to and encompasses all aspects of our
business as we strive to optimise and
capture value at every level from
procurement through to delivery.
We actively review every site, both new and
old, through our value improvement meetings
which are held quarterly and are tracked
centrally. This allows us to benchmark our
success and identify opportunities for further
improvement, ranging from replanning of sites
to redesign and selective enhancements to
our specification. We are committed to not
only delivering what we set out to do but
by delivering more, instilling a discipline
of capturing inflation. We also delivered
an additional 2.8% of contribution margin
on 2015 completions on land acquired
post-2009.
We have improved our UK net operating
asset turn†* to 1.34 times (2014: 1.29 times)
and routinely consider opportunities on sites
which we already own to assess possible
ways of bringing forward the delivery of
much needed new homes.
Higher return potential
We have established a dedicated team,
Major Developments, to evaluate the increasing
number of land opportunities, which have a
high return potential and a lower land and
capital risk funding structure. The Major
Developments team also enables us to control
and enhance large scale land opportunities.
The team seeks acquisition structures that
require low upfront capital investment, offering
reduced land risk and, therefore, reduced
exposure to longer term market changes.
We currently have c.20 sites within our
land portfolio which also broadly have these
characteristics and continue to see these
structures as an attractive route to creating
additional value through enhanced returns
on capital employed and, importantly, as a
means to further reduce future cyclical risk.
More information can be found in the case
study on page 33.
Partnerships
We strive to be an open, transparent and
responsive company for all our stakeholders
and to work with them to understand and
address the wider social, economic and
environmental impacts resulting from our
operations. Based on our employee survey,
97% of our employees who took part believe
that Taylor Wimpey is committed to being
an ethical and responsible company.
During 2015, we continued our partnership
with Centrepoint and our network of six
regional homelessness charities across the
UK, and remained a patron of CRASH, the
construction and property industry’s charity for
homeless people. Our Chief Executive, Pete
Redfern, also continued his work as a Trustee
at Crisis, the national charity for single
homeless people.
In addition to helping to tackle homelessness
and housing issues, in 2015 we supported a
range of other charitable causes at a national
as well as regional level. In total, during 2015
we donated and fundraised over £746k for
registered charities (2014: £539k), in addition
to c.£112k for other organisations, such as
Scout groups and other local community
causes. More information about our charity
partnerships can be found within our
Sustainability Report 2015.
During 2015 we reviewed our Charity Policy
to ensure that it is fully aligned to our values
as a business and that we continue to make a
difference to the charities that we work with by
actively contributing financially, with our time,
energy or through leadership. Going forward
we will support selected charities at both a
national and regional level with a focus on
projects which promote aspiration and
education in disadvantaged areas and
intervening to help tackle homelessness for
seriously economically disadvantaged groups
in the UK. More information can be found
within our new Charity and Community
Support Policy on our website.
Creating additional value
www.taylorwimpey.co.uk
We have a dedicated team – Major
Developments – to evaluate the increasing
number of land opportunities available,
focusing on high return potential with a
lower land and capital risk funding structure.
As a result of this team’s work, we have been
selected by the Ministry of Defence (MoD) as
partners for developing Prince Phillip Barracks
in Hampshire together with Dorchester
Regeneration. This joint venture draws on
our land development and planning expertise,
and the Development Agreement with the
MoD allows us to use a funding structure that
requires low upfront capital investment, offering
reduced land risk and, therefore, reduced
exposure to longer term market changes.
We view this approach as an attractive route
to creating additional value and, importantly, as
a means to further reduce future cyclical risk.
High return
potential
Our progress in 2015
• Continued to review every site through
our value improvement meetings
• We were involved in a wide range
of charitable and community activities
throughout the UK
• Reviewed our Charity Policy
• We have been selected by the Ministry of
Defence (MoD) as partners for developing
Prince Phillip Barracks in Hampshire
together with Dorchester Regeneration
(see case study above)
• Average selling prices on completions
increased in 2015 to £230k (2014: £213k)
benefiting from our focus on better
quality locations and market sales price
increases, which contributed to the rise
in contribution per legal completion
to £59.4k from £49.6k in 2014
Our priorities for 2016
• We will continue to actively review every
site and optimise new sales outlets prior
to opening
• Explore further ways to have a major
impact on charities through partnership
as well as donations
Our KPIs
Contribution per legal completion
Forward order book as a percentage
of completions
Objective
We strive to maximise the level of contribution
per home sold.
KPI
Objective
We look to maximise and maintain a strong
order book.
KPI
Definition
Revenue, net of incentives, less build costs,
land costs and direct selling costs, divided by
the number of homes completed (excluding
joint ventures).
Definition
The number of homes in our year end order
book, expressed as a percentage of the
number of homes completed during the
year (excluding joint ventures).
Why is it key to our strategy?
Our strategy is focused on value and we
continue to prioritise both short and long
term margin performance. Increasing the
contribution per plot is a key driver to
achieving this.
Why is it key to our strategy?
A strong order book provides our customers
with good visibility and provides greater stability
for business planning and enhances our ability
to deliver the best experience for customers
whilst driving the most value for shareholders.
£59.4k
£49.6k
£38.8k
60
30
57.4%
53.7%
56.6%
60
30
0
2013
2014
2015
0
2013
2014
2015
32
33
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Our Approach to Risk Management
Actively managing risks
Our risk assessment and management process
As with any business, Taylor Wimpey faces a number of risks and uncertainties in the course
of the day to day operations. It is only by effectively identifying and managing these risks that
we are able to deliver on our strategic objectives of improving operating profit* margin, return
on net operating assets**, cash conversion and net asset value across the cycle.
The successful management of risk is
essential to enable the Group to deliver its
strategic objectives. Our risk management
and internal control framework defines the
procedures that manage and mitigate risks
facing the business, rather than eliminate risk
altogether and can only provide reasonable
and not absolute assurance against material
misstatement or loss.
The registers identify key operational, financial
and strategic risks to the business, with
strategic risks being identified as part of the
business planning process. Our risk registers
take into account the significance of health,
safety and environmental issues, together with
social and governance matters of the Group
and use a standardised methodology for the
assessment of risk.
Our risk management framework consists
of risk registers that are maintained at all
organisational levels, which detail the risks
faced by the Group, its operating companies
and the central teams that support the
business and a wider stakeholder group.
The standard methodology used in risk
management requires each identified risk to
be assessed and measured according to a risk
matrix. This matrix accounts for the likelihood
and impact of each risk, mitigating actions
and hence the remaining or residual risk.
The risks identified are assessed for the
potential effect on the Group’s short and long
term value. Our risk registers are refreshed
on an ongoing basis as part of our financial
planning cycle. The registers feed into a formal
half yearly risk assessment that identifies the
Principal Risks and Uncertainties (see pages
36 to 37) and other key risks which are
monitored closely, and allows the Board to
re-evaluate the identified strategic risks facing
the Group.
r a t e g ic objectives
S t
Group
Material Risk
Register
Principal
Risks &
Uncertainties
BU & Central
Risk Register
BU & Central
Forecast
and Planning
Process
Risk management a n d m i ti g
n
a tio
Principal Risks &
Uncertainties
The Board, supported by the GMT
and the Audit Committee, will
identify the Principal Risks based
on the assessment of the Material
Risk Register. The Principal Risks
will be disclosed with the half
and full year results. Feedback
regarding changes to Principal
Risks is given to the risk owners
who have been identified to
manage the specific risk on
behalf of the Group.
BU & Central Forecast
and Planning Process
All risk registers are re-evaluated
and completed as part of the
formal budget process every six
months. Each regional business
and central function will re-assess
with their Senior Management
teams the risks that they are
facing and update their risk
registers as required.
Group Material Risk Register
The Material Risk Register is
maintained by the GMT and
reviewed by the Audit Committee
with the promotion, removal or
change of risks being made as
part of their assessment of the
Risk Summaries and their views
of the changes in the strategic
risks facing the Group. Each
Material Risk on the register
will be assessed as to its likely
impact based on the Group’s
standard methodology.
BU & Central Risk Register
From individual risk registers,
all risks are grouped to produce
a Business Unit and Central
Risk Summary. These Risk
Summaries are discussed and
assessed by the GMT and Audit
Committee. The assessment
includes a comparison of the
Risk Summaries over time,
taking into account any changes
in the risk impact assessment
and their views on the strategic
risks facing the Group.
34
www.taylorwimpey.co.uk
Risk materiality process
The Board determines the nature and extent of the Principal Risks it is willing to take in
achieving its strategic objectives, whilst maintaining sound risk management and internal
control systems.
The Board oversees the risk management and
internal control framework of the Group. The
Chief Executive is responsible for implementing
any necessary improvements, with the support
of the GMT. In line with the UK Corporate
Governance Code, the Board holds formal
risk reviews half yearly. The Board reviews the
risk profile of the Group and the significant risks
with the mitigating factors.
At the meeting in February 2016, the Board
completed its annual assessment of risks.
This followed the Audit Committee’s formal
assessment of risk, which was supported
by the detailed risk assessment by the GMT,
and their review of the effectiveness of internal
controls. The key risks affecting the Group
were identified and agreed with the Board.
In addition to the principal industry related
risks set out in the following pages, we also
monitor closely a number of other key internal
and external factors. For example, we have
considered the impact to the Group from the
EU referendum and in the event the UK elects
to leave the EU. We have also considered
those factors that are likely to affect our
reputation e.g. inadequate customer
service and potential cyber-attacks. We have
enhanced our customer service processes
and departments to ensure that the quality of
our homes is delivered to our high standards.
We have also invested in IT security to help
ensure that we identify any cyber-attacks
and respond accordingly.
Principal Risks probability
Whilst the Principal Risks to the Group being
able to execute its business strategy have
not fundamentally changed since 2014, the
likelihood of the risk factors occurring may
have changed. The table shows the
residual likelihood of each risk following our risk
mitigation strategies in both 2015 and 2014.
The table does not consider the relative size of
the associated financial or reputational impacts
for each Principal Risk item.
Low
Medium
High
A
Government policy and
planning regulations
2014
2015
B
Impact of market environment on
mortgage availability and demand
2015
2014
C Material costs and
availability of subcontractors
D Ability to attract and retain
high-calibre employees
E Land purchasing
F Site and product safety
2015
2014
2015
2014
2014
2015
2014
2015
Viability statement
In accordance with provision C2.2 of
the 2014 revision of the UK Corporate
Governance Code, the Directors have
assessed the prospects of the Company over
a longer period than the 12 months required
by the ‘Going Concern’ provision. The Board
conducted their review for a period of
three years, which is in line with the Group’s
operational planning and risk management
review periods.
This operational plan includes the financial
considerations attached to the Principal Risks
of the business as described on pages 36 to
37. It includes macroeconomic and industry
wide projections as well as matters specific
to the Group. To mitigate the risks inherent
in forward-looking projections, budgets are
subject to sensitivity analysis on a series of
realistically possible changes to principal
assumptions, such as variations in house
prices, build costs, planning environments,
the number of completions and margins.
Based on the results of this analysis, the
Directors have a reasonable expectation
that the Company will be able to continue
in operation and meet its liabilities as they
fall due over the three year period of
their assessment.
35
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Principal Risks and Uncertainties
The table below summarises the Group’s Principal Risks and Uncertainties. These are not listed by order of importance.
Management of these risks and uncertainties is the responsibility of the Chief Executive and the Group Management Team,
together with the roles noted below. We maintain a Sustainability and Climate Change Risk and Opportunity Register to monitor
other sustainability issues that could affect the Group. In addition, our climate change related risks and opportunities are
available as part of our 2015 CDP submission. More information is available at www.taylorwimpey.co.uk/corporate/sustainability
Relevance to strategy
Potential impact on KPIs
Mitigation
Progress in 2015
A
Government policy and
planning regulations
The National Planning Policy
Framework (NPPF) and the Localism Act
are becoming established, whilst uptake
of the Community Infrastructure Levy
(CIL) is increasing, but slowly.
The Housing and Planning Bill was
presented to Parliament in the Autumn and
is closely linked to many of the initiatives
announced in the Chancellor’s Autumn
Statement and Spending Review. These
aim to address the disparity between the
demand and supply for housing in the
UK, by seeking changes to the planning
system and signalling potential financial
considerations for some sections of our
customer base. The position is dynamic as
a number of elements, particularly around
the Starter Homes initiative, are still to be
fully defined which, as they are clarified and
embedded, could have a disruptive effect
on the planning system, sales rates, site
mixes and customer behaviour.
Responsibility
• Land Director
• Regional Managing Directors
Impact of market environment
on mortgage availability
and demand
Mortgage availability and affordability
constrain the demand for housing.
Following the Mortgage Market Review in
2014, stricter guidelines were introduced
for lenders to assess mortgage affordability.
In 2015, the Bank of England’s Financial
Policy Committee gained new powers,
to set loan-to-value and debt-to-income
limits for residential mortgages.
The Government has extended the
Help to Buy equity loan scheme to 2021,
although there is uncertainty over the
impact when the scheme ends.
Responsibility
• UK Sales and Marketing Director
• Regional Sales and Marketing Directors
Material costs and availability
of subcontractors
A continued increase in housing production
may further reduce the availability of
materials and subcontractors, and put
pressure on utility firms to keep up with
the pace of installation. This results in build
programme and completion delays and
an unexpected increase in costs.
Responsibility
• Head of Procurement
• Regional Commercial Directors
B
C
36
• With the introduction
of The Housing and
Planning Bill, we may
be required to meet
higher levels of planning
obligations and we may
incur additional costs
to meet increased
regulatory requirements.
• Unforeseen delays or
inability to obtain suitable
consents, could impact
on the number or type
of homes that we build.
• The locally produced
CIL charge schedules
may increase costs,
impacting the viability
of current developments.
Where CIL charges are
not in place, there could
be an impact on gaining
planning consent or
Judicial Review
challenge.
• This could have a
detrimental impact on
the contribution per plot.
• A reduction in demand
for new homes below
normal levels could
negatively impact on
both profit and cash
generation. This would
have an adverse effect
on return on net
operating assets
and net debt.
Our ability to build homes
and communities is dependent
upon drawing up site proposals
which meet the needs and
affordability of our customers,
obtaining planning permissions
in acceptable timeframes and
achieving other regulatory
requirements and permits.
The NPPF has been positive for
housebuilding, although there
remains a risk of delayed or
refused planning applications,
increased timescales to
the discharge of planning
conditions and greater
complexity around S106
since the introduction of CIL.
As all elements of the recent
announcements are clarified,
there could be a change in
demand for specific products
at our planned sites. In turn,
this may lead to changes to
site mixes, and to extended
timeframes to gaining consent.
The majority of the homes that
we build are sold to individual
purchasers who take on
mortgages to finance their
purchases. A change in
business confidence,
employment opportunities
or significant changes in
the base rate may impact
on the demand for housing.
In particular, the ability for first
time buyers and investors to
purchase homes is impacted
by changes in mortgage
availability at the higher
loan-to-value levels, as it
would impact on the level
of deposits required.
In order to optimise our build
cost efficiency, whilst retaining
the flexibility to commence
work on new sites as planning
consents allow, the vast
majority of work carried
out on site is performed
by subcontractors.
Without the introduction of
new resources into the housing
market, labour and material
prices could increase.
• If the availability of
subcontractors or
materials is insufficient
to meet demand, this
could lead to increased
build times and costs,
thereby reducing
profitability.
• Lack of skilled
subcontractors could
also result in higher levels
of waste being produced
from our sites and lower
build quality.
Our customer and
community engagement
strategy is embedded and
having a positive effect.
We have been successful
in gaining planning
consents through the year
with particular emphasis
on the conversion of the
strategic land pipeline.
We continued our
participation in the local
Plans Management Group
(PMG), via the HBF, to
ensure local plans are
robust and CIL charge
schedules are appropriate.
We have met with
Government officials and
contributed to the HBF
submissions in respect of
The Housing and Planning
Bill and the Starter Homes
initiative in particular.
We offer the Government-
backed Help to Buy
scheme and have seen
strong interest in the
scheme amongst
our customers.
Throughout 2015 we have
continued to develop good
working relationships with
established mainstream
lenders and those wishing
to increase volume within
the new build market.
Following the recent growth
in housebuilding, availability
and cost of materials has
stabilised and meets
current demand. The
supply of quality
subcontractors remains
challenging. The Group has
agreed product lines and
volumes with key suppliers
to mitigate long lead times
and shortages.
We operate within our
comprehensive community-
led planning strategy. This
improves communications
with all parties, but especially
local communities, thereby
enhancing our ability to
deliver developments that
meet local requirements.
We consult with Government
agencies and opposition
parties on housing policy,
both directly and indirectly as
a member of industry groups,
to highlight potential issues
and to understand any
proposed changes to
regulations.
Our local teams select the
locations and home designs
that best meet the needs
of the local community and
customer demand in the
present and future. We
evaluate new outlet openings
on the basis of local market
conditions and regularly
review the pricing and
incentives that we offer.
We work closely with the
financial services industry
to ensure customers
receive good advice
on the procurement of
mortgage products.
We maintain regular contact
with suppliers and negotiate
contract volume, pricing and
duration as appropriate. We
provide both high-level and
site specific programme
information to aid with
demand planning.
Competencies are considered
as part of our subcontractor
selection process, particularly
in relation to health and safety,
quality, previous performance
and financial stability.
We work to address the skills
shortage with apprenticeship
schemes and the Construction
Industry Training Board.
www.taylorwimpey.co.uk
Relevance to strategy
Potential impact on KPIs
Mitigation
Progress in 2015
D
Ability to attract and retain
high-calibre employees
Recruiting employees with inadequate skills
or in insufficient numbers, or not being able
to retain key staff with the right skills for the
future, could have a detrimental impact on
our business.
Responsibility
• Group HR Director
• Every employee managing people
Our value cycle requires
significant input from skilled
people to deliver quality homes
and communities for our
customers.
There remains an increasing
incidence of ‘poaching’ in the
housebuilding market. The
demand for high-quality trained
and experienced employees
has increased and is key to
achieving our strategic goals.
• Not having the right
teams in place could
lead to delays in build,
quality issues, reduced
sales levels, poor
customer service and
reduced profitability.
E
Land purchasing
The purchase of land of poor quality, at
too high a price, or incorrect timing of
land purchases in relation to the economic
cycle could impact future profitability.
Land is the major ‘raw material’
for the Group. The limited
availability of good-quality land
at an attractive price throughout
the housing cycle leads to
significant competition.
• Purchasing poor-quality
or mispriced land, or
incorrectly timing land
purchases would have a
detrimental impact on our
profitability and returns.
Responsibility
• Divisional Managing Directors
• Regional Managing Directors
• Regional Land and Planning Directors
• Strategic Land Managing Directors
The disciplined purchasing of
land of the appropriate quality,
on attractive terms at the right
time and scale in the economic
cycle, will enhance the Group’s
ability to deliver sustainable
margins through the cycle.
• Acquiring insufficient land
would reduce our ability to
actively manage the land
portfolio and create value
for shareholders.
F
Site and product safety
Building sites are inherently dangerous
places. Unsafe practices by our employees
or subcontractors have the potential to
cause death or serious injury.
Responsibility
• Director of Health, Safety
and Environment
• Every employee and subcontractor
Our operations involve, and
interface with, a large number
of people. People range
from employees and
subcontractors, to customers
and their families, who live on
or visit our sites each day. We
want all of these people to go
home at the end of the day
safe and uninjured.
• In addition to the
potentially tragic personal
impact of an accident on
site or after customer
completion, there is
potential for legal
proceedings, financial
penalties, reputational
damage and delay to
the site’s progress.
We closely monitor employee
turnover levels on a monthly
basis and conduct exit
interviews, as appropriate,
to identify any areas for
improvement.
We benchmark our
remuneration to ensure
we are competitive within
the industry.
Clear succession plans are
in place for key roles within
the Group. We hold regular
development reviews to
identify training requirements.
During 2015, we increased
the number of employees
on apprentice, management
and graduate training
schemes. We broadened
our recruitment channels,
encouraging a diverse
candidate base. Our
renewed approach to
succession planning
enabled more internal
candidates to be promoted
to senior roles. Finally, the
benefits package has been
refined and aligned across
weekly and monthly paid
employees.
Our Land teams select and
appraise each site, with the
appraisal process ensuring
that each project is financially
viable, consistent with our
strategy and appropriately
authorised.
The short term land
market remained benign
throughout 2015 enabling
us to continue to invest
in value-creating land
opportunities at investment
margins of around 20%.
We strive to be the
developer of choice, through
a comprehensive approach
encompassing land vendors,
land agents, local councils
and local communities. Our
Strategic Land teams work
alongside regional businesses,
to identify and secure land
with the potential for future
development and to promote
it through the planning
system.
We have a comprehensive
health, safety and
environmental (HSE)
management system in
place, which is integral to our
business. This is supported
by our policies and
procedures to ensure that
we live up to our intention of
providing a safe and healthy
working environment and
build homes that comply
with the required regulations.
We provide extensive HSE
training for our employees,
running HSE induction
training, poster campaigns
as well as providing regular
site toolbox talks for our
contractors and operatives.
In 2014, we launched The
Operative’s Journey, a major
new initiative to improve
communications to our
supply chain and site work
force, to create partnering
contractors to share
ownership for maintaining
a safe site.
All HSE issues are reviewed
by the GMT and, where
appropriate, actions put
in place to rectify issues
or prevent a recurrence.
The landbank is now at
the optimal size range to
deliver our strategy. Together
with the strong conversion
of the strategic pipeline, our
reliance on purchasing short
term land has diminished,
which provides some
insulation from an
increase in land price.
We continue to compare
favourably with the UK
housebuilding and
construction industry in
terms of site safety. We
have continued to keep
our Annual Injury Incidence
Rate (AIIR) for reportable
injuries low at 175 per
100,000 employees and
contractors in 2015 (2014:
209). We reduced our AIIR
for major injuries from 26
in 2014 to 18 in 2015.
During 2015, we continued
our site safety training,
extending training to over
3,135 groundworkers’
supervisors, each receiving
a site safety supervisory
qualification. We also
introduced stages 2 and 3
of The Operative’s Journey
which aims to foster shared
ownership with our supply
chain and operatives, for
maintaining a safe site.
We continually monitor
procedures and implement
improvements to the work
undertaken on site.
37
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Annual Report and Accounts 2015
Group Financial Review
Driving the quality
of our returns
The Group Financial Review is presented at
Group level, which includes Spain, unless
otherwise indicated. A short summary of
the Spanish business follows.
Joint ventures are excluded from the Business
Model and Group Financial Review, unless
stated otherwise. For the purpose of clarity,
joint ventures are separated out in the Group
Financial Review.
Income statement
Group revenue increased by 16.9% to
£3,139.8 million in 2015 (2014: £2,686.1
million) from completions of 13,470 (2014:
12,458). The increase was driven by much
improved selling prices in the UK, up 8.0% to
£230k (2014: £213k), and UK volume growth
of 7.5% to 13,219 completions (2014: 12,294).
Average selling prices on private completions
increased by 8.5% to £254k (2014: £234k) in
the UK, with this increase a result of both our
underlying shift to better quality locations and
capturing market sales price increases.
The UK land cost per unit sold at £42.4k is
lower than £45.1k in the prior year, reflecting
the increased contribution from sites acquired
through the strategic pipeline and trading
from a lower number of sites acquired before
the economic downturn. Total UK land cost
per completion as a percentage of selling
prices was 18.4% (2014: 21.2%) reflecting
the benefits of conversions from the strategic
land pipeline, partially offset by product mix
and an increase in volumes from the London
Market, where land cost is a higher proportion
of revenue.
Build cost per unit in the UK increased to
£121.9k (2014: £112.9k). This reflects both
the higher product specification required in
better quality areas and the impact of build
cost inflation. Other direct costs and selling
expenses per unit increased to £6.0k (2014:
£5.3k). The improvements in how we engage
with potential customers mean that total selling
expenses are marginally higher as a percentage
of revenue.
We are focused on maximising the contribution
per completion as we seek to drive the quality
of returns. Contribution per completion
increased by 19.8% to £59.4k for 2015,
(2014: £49.6k), as a result of better quality
locations and improving market conditions,
offset partially by build cost increases.
Gross profit before exceptional items, of
£788.0 million (2014: £620.9 million), increased
by 26.9% and included a positive contribution
of £8.9 million (2014: £15.9 million). Positive
contribution represents previously written
down inventory allocated to a plot which
has subsequently resulted in a gross profit
on completion. This can be due to revenue
outperformance, cost efficiencies or product
mix improvements. These amounts are stated
before the allocation of overheads which are
excluded from the Group’s net realisable value
exercise. Whilst the UK housing market has
continued to improve, specific issues on
certain impaired sites have resulted in the
Group recording a net addition of £0.6 million
of inventory write-downs (2014: £18.7 million
reversal). The net addition in the year consisted
of a release of previous impairments of £6.6
million and additional write-downs to the lower
of cost and net realisable value of £7.2 million
on previously impaired sites.
In 2015, 6% (2014: 14%) of the Group’s UK
completions were from sites that had been
previously impaired. In Spain, 53 plots (2014:
50) were completed that had previously been
2015 has been a record year for
Taylor Wimpey, delivering an operating
profit margin of 20.3% and return on
net operating assets of 27.1%.
Ryan Mangold
Group Finance Director
38
Financial highlights
2015 Group results
Completions including joint ventures
Revenue (£m)
Operating profit* (£m)
Operating profit* margin (%)
Profit before tax and before exceptional items (£m)
Profit before exceptional items (£m)
Basic earnings per share (p)
Adjusted earnings per share†† (p)
Maintenance dividends per share – total (p)
www.taylorwimpey.co.uk
UK
13,341
3,081.7
627.0
20.3
Spain
251
58.1
10.0
17.2
Consolidated
13,592
3,139.8
637.0
20.3
603.8
482.3
15.1
14.9
1.67
Note: More information on segmental reporting can be found in Note 5 to the Consolidated Financial Statements.
impaired. The Group anticipates that c.4%
of UK 2016 completions will come from
sites that have been previously impaired.
by our conversion of the strategic pipeline, as
well as delivering operational efficiencies across
the business.
This resulted in a profit, before exceptional
items, for 2015 of £482.3 million (2014:
£359.7 million), 34.1% up on the prior year.
We continue to monitor our management
structures and overhead costs to maximise
value and returns. In the short term we expect
an increase in overheads as the initiatives
implemented for improvements in employee
development and customer service are
brought on stream.
As previously announced, we now detail
separately the trading metrics of joint ventures.
During 2015, completions from joint ventures
were 122 (2014: 160). The total order book
value of joint ventures as at 31 December
2015 was £60 million (31 December 2014:
£69 million) representing 118 homes
(31 December 2014: 159). Our share of
results of joint ventures in 2015 was
£4.9 million (2014: £2.6 million).
Pre-exceptional net finance costs for the
period were £33.2 million (2014: £30.6 million).
Interest on overdraft, bank and other loans
reduced by £2.8 million year on year benefiting
from the ‘amend and extend’ agreement with
the banks in February 2015. These lower
debt finance costs have been offset by
higher unwind of discount on land creditors.
During 2015, average net borrowings were
£94.8 million (2014: £148.7 million).
Pre-exceptional profit before tax for the
year from operations increased by 34.1%
to £603.8 million (2014: £450.1 million). The
pre-exceptional tax charge was £121.5 million
(2014: £90.4 million) with an underlying tax rate
of 20.1% (2014: 20.1%) that largely reflects the
statutory tax rate in the UK.
Operating profit* increased to £637.0 million
(2014: £480.7 million), delivering an operating
profit* margin of 20.3% (2014: 17.9%), an
increase of 240 basis points. The UK operating
profit* margin in the second half of the year was
21.1% (H2 2014: 19.3%). These improvements
have been driven by the ongoing benefits of the
quality of our short term land acquisitions and
Given the continued improvement in the
profitability in the Spanish business, driven by
the performance on recently acquired sites and
an improvement in several markets we operate
in, a deferred tax asset of £8.0 million has been
recognised as an exceptional item in the year.
£68.4 million of unrecognised Spanish trading
losses remain, as at 31 December 2015.
Basic earnings per share was 15.1 pence
(2014: 11.6 pence). The adjusted basic
earnings per share†† was 14.9 pence
(2014: 11.2 pence), up 33.0%.
Balance sheet
Net operating assets were £2,442.6 million
(31 December 2014: £2,265.0 million),
reflecting a net investment of £269.1 million
(2014: £409.1 million) year on year in land and
work in progress, funded mostly by increased
profitability. Return on net operating assets**
increased by 460 basis points to 27.1% (2014:
22.5%), ahead of our medium term target of
20%, reflecting improved profitability and
balance sheet discipline.
Group net operating asset turn†* increased
to 1.33 times (2014: 1.26 times), as a result
of trading from better quality locations and
focused land and work in progress investment.
39
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Group Financial Review continued
Relative to our medium term targets of adding
15% to net assets before any cash distributions
to shareholders, net assets at 31 December
2015 increased by 19.6% before cash
distributions and 7.4% overall year on year to
£2,723.3 million (31 December 2014: £2,535.3
million). The net asset increase was driven by
profitability in the period offset by the £58.8
million maintenance dividend and the
£249.6 million cash return.
As at 31 December 2015, the Group held
inventory that had been written down to net
realisable value of £139.5 million (31 December
2014: £296.6 million) of which the balance
in the UK was £115.2 million (31 December
2014: £269.6 million). As at 31 December
2015, the associated write-downs were £167.7
million (31 December 2014: £206.2 million) of
which the balance in the UK was £124.2 million
and principally related to 14 locations.
As at 31 December 2015, in the UK, 4% of
our short term owned and controlled land
was impaired (31 December 2014: 7%), with
79% of the short term owned and controlled
landbank purchased after 2009, 60% of which
was sourced through our strategic pipeline,
resulting in a land cost to average selling price
in the short term owned landbank of 16.3%
(31 December 2014: 17.3%).
We continue to use land creditors as a way of
funding land acquisitions where this makes the
most commercial sense and is value-enhancing
for the business. Land creditors increased to
£629.8 million (2014: £487.7 million) and,
combined with net cash, resulted in adjusted
gearing of 14.3% (31 December 2014: 14.8%).
The mortgage debtor balance was £94.6
million at 31 December 2015 (31 December
2014: £104.8 million), with the decrease due
to net redemptions of £11.3 million, offset by
a fair value uplift of £1.1 million.
Our deferred tax asset reduced to £55.7 million
(31 December 2014: £157.5 million), due to
utilisation against profits in the period. During
2015, the Group fully utilised its deferred tax
asset arising from UK trading losses and
there are no material unrecognised UK
trading tax losses.
Retirement benefit obligations of £178.4 million
at 31 December 2015 (31 December 2014:
£183.8 million) comprise a defined benefit
pension liability of £177.1 million (2014: £182.4
million) and a post-retirement healthcare liability
of £1.3 million (2014: £1.4 million). The deficit
in the pension scheme has decreased by
£5.3 million due to contributions in the period
partially offset by actuarial assumptions, most
notably discount rates and inflation. In 2015
we contributed £23.1 million in pension
contributions (2014: £36.3 million).
Cash flow
Net cash increased substantially to
£223.3 million at 31 December 2015 from
£112.8 million at 31 December 2014, despite
returning £308.4 million to shareholders by
way of dividends in the year. This improvement
in net cash is largely as a result of strong
performance in underlying trading, whilst
at the same time continuing to invest in
our landbank. Total land spend, including
movement in land creditors, was
£556.3 million (2014: £795.7 million).
During the year we increased our investment
in work in progress, including increasing our
presence in the central London market year on
year, with work in progress in Central London
of £106.8 million as at 31 December 2015
(31 December 2014: £67.0 million). In 2015,
we paid £14.5 million in interest costs (2014:
£14.6 million), £308.4 million in dividends
Quality of landbank
We believe that the strength and quality of our landbank is one of the key differentiators for
Taylor Wimpey. Please see pages 22 to 23 for more information. The chart below shows
the source of land for the last five years of completions, and the make up of the short term
landbank as at 31 December 2015 by type of land source.
100
80
60
40
20
0
i
n
g
r
a
m
*
t
fi
o
r
p
g
n
i
t
a
r
e
p
o
K
U
25%
20%
15%
10%
5%
FY 2011
completions
FY 2012
completions
FY 2013
completions
FY 2014
completions
FY 2015
completions
Short term
landbank FY 2015
0
Pre 2009 short term land
Post 2009 strategic land
Pre 2009 strategic land
Operating profit* margin
Post 2009 short term land
Cash generation (£m)
At this stage in the cycle and given our
strong land position, the focus on converting
a high proportion of our profitability into cash
is an important measure. The chart below
shows cash generated by operations on
an annual basis.
500
400
300
200
100
0
2011
2012
2013
2014
2015
* Operating profit is defined as profit on ordinary activities before net finance costs, exceptional items and tax, after share of results of joint ventures.
** Return on net operating assets is defined as 12 month rolling operating profit divided by the average of the opening and closing net operating assets, which is defined as net assets
less net cash less deferred tax balances, less any accrued dividends.
*** Operating cash flow is defined as cash generated by operations before tax and interest paid on a rolling 12 month basis.
† Tangible net assets per share is defined as net assets before any accrued dividends excluding goodwill and intangible assets divided by the number of ordinary shares in issue at the
end of the period.
†† Adjusted basic earnings per share represents earnings attributed to the shareholders of the parent, excluding exceptional items and tax on exceptional items, divided by the
weighted average number of shares in issue during the period.
††† Growth in net assets before cash distributions is defined as the percentage change between closing net assets pre accrued and paid returns to shareholders on a rolling 12 month
basis and closing net assets on a rolling 12 month basis from the comparative period.
†* Net operating asset turn is defined as total revenue divided by the average of opening and closing net operating assets. Based on rolling 12 months.
www.taylorwimpey.co.uk
Value distributed during 2013 – 2015 (£m)
This chart shows how value is distributed amongst stakeholders and invested in the business.
500
400
300
200
100
0
Contribution to
local communities
Employment
Pension contributions
Taxes
Net investment
in land and WIP
Debt servicing
Dividends
● 2013
● 2014
● 2015
and purchased £2.0 million of own shares for
settlement of future vesting of share schemes.
Average net debt for the year was £94.8 million
(2014: £148.7 million).
Financing structure
As at 31 December 2015, the Group had
total committed debt facilities of £650 million
providing significant financial capacity. During
February 2015 agreement was reached to
extend the existing revolving credit facility
to mature in 2020 and at reduced margins
and fees. This resulted in an interest saving of
c.£2.5 million in 2015. The average maturity
of our committed facilities is now four years.
The strength of the Group’s balance
sheet and continued strong operational and
financial performance has been reflected in
the continued improvement of Taylor Wimpey’s
corporate credit ratings. We are currently
rated investment grade by two of the
three main agencies.
Spain
We have seen a meaningful improvement in
the Spanish market in 2015. We completed
251 homes in 2015 (2014: 164) at an average
selling price of €315k (2014: €250k). The total
order book as at 31 December 2015 stood at
270 homes (31 December 2014: 233 homes).
The Spanish business delivered an improved
operating profit* of £10.0 million for 2015
(2014: £4.2 million) and an operating profit*
margin of 17.2% (2014: 12.5%). Looking
ahead, we remain cautiously optimistic given
the significant contribution of newly acquired
sites, whilst conscious of the wider macro
European economic environment.
Going concern
The Directors remain of the view that the
Group’s financing arrangements and balance
sheet strength provides both the necessary
facilities and covenant headroom to enable the
Group to conduct its business for at least the
next 12 months. Accordingly, the consolidated
financial statements are prepared on a going
concern basis.
Accounting standards
The consolidated financial statements
have been produced in accordance with
International Financial Reporting Standards
(IFRS) as endorsed and adopted for use in
the EU. There have been no changes to IFRS
during 2015 that have a material impact on
the Group results.
For more information about our viability statement
see page 35
KPI
Approval of the Strategic Report
This Strategic Report was approved by
the Board of Directors and signed on its
behalf by
Pete Redfern
Chief Executive
40
41
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Governance
44 Board of Directors
46 Corporate Governance
51 General Board Governance
58 Nomination Committee Report
63 Audit Committee Report
68 Remuneration Report
86 Statutory, Regulatory
and Other Information
42
43
Taylor Wimpey plc
Annual Report and Accounts 2015
Board of Directors
www.taylorwimpey.co.uk
2 Pete Redfern
Chief Executive
3 Ryan Mangold
Group Finance Director
4 James Jordan
Group Legal Director
and Company Secretary
1 Kevin Beeston
Chairman
Nomination Committee
(Committee Chairman),
Remuneration Committee
5 Kate Barker DBE
Independent
Non Executive Director
Nomination Committee,
Audit Committee,
Remuneration Committee
6 Baroness Ford
of Cunninghame
Independent
Non Executive Director
Nomination Committee,
Remuneration Committee
(Committee Chairman)
7 Mike Hussey
Independent
Non Executive Director
Nomination Committee,
Audit Committee
8 Rob Rowley
Independent
Non Executive
Director and Senior
Independent Director
Nomination Committee,
Audit Committee
(Committee Chairman),
Remuneration Committee
9 Humphrey Singer
Independent
Non Executive Director
Nomination Committee,
Audit Committee
July 2010
July 2007
November 2010
July 2011
April 2011
April 2013
July 2011
January 2010
December 2015
Committee membership
Date of
appointment
Skills & experience
Kevin was formerly Chairman
of Serco Group plc and also of
Domestic and General Limited;
and was previously a non
executive director of IMI plc.
Kevin has a wealth of
commercial, financial and high
level management experience
including being a former
CEO of a FTSE 100 company.
He also has significant
experience of chairing boards
of both public and private
companies and of being
a non executive director and
a member of audit, nomination
and remuneration committees.
Pete was previously Group
Chief Executive of George
Wimpey Plc and, before that,
successively held the posts
of Finance Director and Chief
Executive of George Wimpey’s
UK Housing business.
Pete has full day to day
operational responsibility
for delivering the Company’s
strategy in a profitable,
safe and environmentally
responsible manner. He has
significant financial, operational
and management experience,
gained from his various roles
in industry and from his time
at KPMG. His appointment
in 2014 to the board of Travis
Perkins plc as a non executive
director has further broadened
his experience at plc board
level.
Ryan previously held the post
of Group Financial Controller
of Taylor Wimpey plc. Before
joining Taylor Wimpey, Ryan
was Group Financial Controller
of Mondi Group for five years,
prior to which he held a number
of senior finance roles with the
Anglo American plc group
of companies.
Ryan has operational
responsibility for managing the
Company’s finances. He has
financial, treasury, risk and
financial control expertise
including that gained from
his time with Mondi Group
and Anglo American plc.
James, a solicitor, was
previously Group Company
Secretary and General Counsel
of George Wimpey Plc from
February 2002 until July 2007,
when he was appointed to
the same position with Taylor
Wimpey plc. Before joining
the Group, James held senior
legal and company secretary
roles in industry which included
positions with The Rugby
Group Plc and English
China Clays Plc.
James oversees compliance
with legal and regulatory
obligations and also manages
the Company’s Secretariat and
Legal Departments. He has
significant legal, commercial,
transactional and regulatory/
governance related experience.
External appointments
Kevin is Chairman of
Equiniti Group plc and
a non executive director
of The Football Association
Premier League Limited.
Pete is a non executive
director and member of the
remuneration committee
of Travis Perkins plc, a Trustee
of the homelessness charity
Crisis and a member of
the board of the Home
Builders Federation.
8
6
5
4
3
2
1
7
9
44
Kate is a business economist
and was previously a member
of the Bank of England’s
Monetary Policy Committee
(MPC) from 2001 until May
2010. During this period,
Kate also led two major policy
reviews for Government, on
housing supply and on land
use planning. Before joining the
MPC, she was Chief Economic
Adviser at the CBI. Kate was
awarded a CBE in 2005 for
services to social housing and
a DBE in 2014 for services
to the economy.
Kate is an industry-recognised
economist who also brings a
wider economic insight gained
through her various roles,
including as a Member of the
Oversight Board of the Office
for Budget Responsibility.
Kate is a Trustee Director and
Chairman of the British Coal
Superannuation Scheme; is
presently interim Chairman of
Electra Private Equity plc; and
a non executive director of the
Yorkshire Building Society.
Margaret is an Honorary
Professor of Real Estate
at Glasgow University and
an Honorary Member of the
Royal Institute of Chartered
Surveyors. She formerly chaired
the Olympic Park Legacy
Company; English Partnerships;
Barchester Healthcare Limited;
and May Gurney Integrated
Services Plc. Prior to these
appointments, Margaret had
a long career in management
consulting with Price
Waterhouse and then
Eglinton Management
Centre, which she founded.
Margaret has wide-ranging
experience in a number of
sectors and also has extensive
knowledge of the property
sector, gained through various
roles. She has significant
plc experience including the
chairmanship of both boards
and board committees. She
also sits in the House of Lords.
Margaret is Chairman of
STV Group plc and Grainger
Group plc and a non executive
director of SEGRO plc.
Mike is Chief Executive of
Almacantar, a private property
investment and development
company which he founded
in February 2010. He has held
a number of senior roles in the
property sector, most recently
as an executive board director
of Land Securities plc. Prior to
that position, Mike was Head
of Leasing and Marketing for
Canary Wharf Group plc, and
held a number of senior posts
in the property industry with the
British Council for Offices, the
City Property Association, and
as Chairman of the Regeneration
and Development Committee of
the British Property Federation.
Mike has in-depth expertise
in land development and
marketing, particularly in
London, gained from his
previous roles as a director
of Land Securities plc and as
Head of Leasing and Marketing
of the Canary Wharf Group plc.
Mike is a Fellow of the
Royal Institution of Chartered
Surveyors and a Trustee
of the Royal College of
Surgeons of England.
Humphrey was appointed
to the Board on 9 December
2015. He is Group Finance
Director of Dixons Carphone
plc, a role to which he was
appointed in 2014. Humphrey
was previously Group Finance
Director of Dixons Retail plc
and held senior finance-related
roles within Dixons, including
as Group Financial Controller,
and prior to that with
Coca Cola Enterprises.
Humphrey has a wealth
of financial experience and
expertise in the areas of both
digital solutions and customer
services, which will augment
the Board’s skill sets in
these areas.
On appointment to the
Board, he also joined the
Audit Committee, where
his financial expertise will
assist the Committee in the
performance of its duties, and
the Nomination Committee.
Humphrey is Finance Director
of Dixons Carphone plc.
Rob was previously
Deputy Chairman of Cable
and Wireless plc, a director
of Reuters Plc, and a non
executive director of Prudential
plc; Taylor Nelson Sofres plc;
and Intu Properties plc.
Rob has a wealth of financial,
commercial and management
expertise, principally from
his time as Finance Director
of Reuters plc and Deputy
Chairman of Cable & Wireless
plc. He has substantial
experience as a non executive
director including the chairing
of audit committees and has
recent and relevant financial
experience as required by the
UK Corporate Governance
Code.
Rob is the Senior Independent
Director and Chairman
of the audit committee of
moneysupermarket.com
Group PLC; Senior Independent
Director of Greene King plc;
a non executive director
and Chairman of the audit
committee of Morgan Advanced
Materials plc; and non executive
director of Greene King plc
and Camelot Group.
Board gender diversity
Board gender diversity (%)
9
6
3
0
7
22
3
3
2
2
0
Executive
Women
Group
Board
Men
Non
Executive
Our Committees
25
22
22
22
22
30
20
10
0
2011 2012 2013
2014 2015
% of women on Board
Non Executive
Director experience
1
1
2
1
2
2
1
2
Financial serivces
Healthcare
Property
Marketing
Media
Public sector
Economist
Materials
Non Executive Board tenure
2
1
2
0-2 years
3-4 years
5-6 years
See page 58 for more
KPI
on our Nomination Committee
See page 63 for more
KPI
on our Audit Committee
See page 68 for more
KPI
on our Remuneration Committee
45
Governance pages 42-91Strategic Report pages 2-41Financial Statements pages 92-146Shareholder Information pages 147-157
Taylor Wimpey plc
Annual Report and Accounts 2015
Chairman’s Introduction to Corporate Governance
Highlights for 2015
During the year, we:
• Fully met all of the requirements of
the UK Corporate Governance Code
• Fully met all of the revised
requirements set out in the September
2014 Guidance on Risk Management,
Internal Control and Related Financial
and Business Reporting
• Improved the functioning of the
Board and its Committees through
implementing the findings of the
externally-facilitated Board
Appraisal for 2014
• Conducted a comprehensive
internally-facilitated Board
Appraisal during 2015
• Further developed the Company’s
succession and contingency
planning across the Group
• Implemented a number of new
diversity and inclusivity initiatives
and further progressed our
overall agenda
• Introduced the new Viability Statement
designed to give shareholders greater
assurance on the Company’s longer
term prospects
• Conducted an external appraisal
of the Company’s ‘Whistleblowing’
process and procedures
• Conducted an external appraisal
of the Company’s procedures for
dealing in the Company’s shares
In my capacity as Chairman of the Board, I am very pleased to again have this opportunity
to make a personal statement on the Company’s approach to corporate governance.
Firstly, I would like to emphasise again that the Board continues to take corporate governance
very seriously and has been able to demonstrate this over many years with full compliance with the
UK Corporate Governance Code (the ‘Code’). The requirements of the Code are summarised in
the table on page 50 where we have included a signpost directing you to the relevant page which
sets out in detail how the Company has complied with the various provisions. To demonstrate
the Board’s proactive approach to corporate governance, the Company has consistently sought
to comply with planned improvements to the Code, and with wider governance initiatives often in
advance of their formal application to our reporting years. The Board receives regular briefings and
updates on corporate governance, both at Board and Committee meetings and, where necessary
in between such meetings, which all Directors continue to find very helpful.
This report on corporate governance aims to set out and explain in clear terms the governance
related processes and procedures in place at Taylor Wimpey which we believe are essential for
delivery of the long term success of the Company. It is these processes that ensure we comply
with all applicable laws and regulations as well as, of course, meeting the requirements of
our shareholders and their representative bodies, with whom we are always very pleased to
engage – and proactively did so again during 2015 and into 2016. The Board strongly believes
that good governance should be focused not only on how the Board itself operates effectively
but also, and very importantly, on the culture within which all of our businesses operate and
conduct themselves on a day to day basis.
As you will see from the Highlights for 2015 there were a number of significant developments
in the area of corporate governance during the year, both externally and internally. These were
welcomed by the Board as they help to provide shareholders and all of our stakeholders
increased assurance that the Company is being managed with their best interests firmly
in mind.
The main changes which apply to reporting for 2015 cover a number of areas including:
going concern; risk management and internal control; the introduction of a viability statement;
requiring remuneration to be designed to promote the long term success of companies;
encouraging greater shareholder dialogue; the review of Director time commitments;
and further ways to improve the functioning of a Board through wider areas of diversity. The
Board fully supports each of these changes and improvements. The plans to address the new
requirements and necessary improvements are set out in greater detail in this Report and in
the separate Reports of the Nomination, Audit and Remuneration Committees, which can be
found on pages 58, 63 and 68. Within these Reports, corporate governance developments
likely to be implemented during 2016 are also discussed as appropriate.
In line with the Code, the Board conducts its annual evaluation exercise via an independent
external facilitator once every three years and it was last carried out in this way in 2014.
Consequently the evaluation for 2015 was conducted internally and was done so via
a comprehensive and updated process which involved all Directors.
The Board strongly believes that good governance should be
focused not only on how the Board itself operates effectively but also,
and very importantly, on the culture within which all of our businesses
operate and conduct themselves on a day to day basis.
Kevin Beeston
Chairman
www.taylorwimpey.co.uk
In accordance with the Code, all Directors will again be subject
to election or re-election as appropriate by shareholders at the
Annual General Meeting of the Company which is being held on
28 April 2016 (AGM). Biographical details of each Director can
be found on pages 44 to 45 and also on page 152.
I believe that the new balance and composition of the Board,
with myself as Chairman, three Executive Directors and five
Independent Non Executive Directors, will continue to provide
the right blend of experience, expertise and challenge to ensure
good governance so as to enable the Company to successfully
implement its strategy.
Board committees
Chairman of
the Nomination
Committee
Kevin Beeston
Chairman of the
Audit Committee
Rob Rowley
Chairman of the
Remuneration
Committee
Baroness Ford
of Cunninghame
See pages 58-62
KPI
for more information
See pages 63-67
KPI
for more information
See pages 68-85
KPI
for more information
Board Committees
In compliance with the Code, the Board has three Committees,
the Nomination, Audit and Remuneration Committees.
The Nomination Committee has been closely involved during
2015 in a number of important actions and initiatives including:
• Reviewing the balance, diversity, independence and effectiveness
of the Board.
• The appointment by the Board of an additional Independent
Non Executive Director – Humphrey Singer.
• The carrying out of a detailed review of both succession and
contingency planning across the Group in order to achieve the
Company’s strategic aim of attracting, developing and retaining
the best quality people at all levels of the Company, and to
improve our talent management.
• Reviewing strategy; establishing targets; and driving and monitoring
progress in improving diversity generally throughout the Group.
The exercise considered the effectiveness of the Board, each Board
Committee and each Director including the sufficiency of their individual
time commitment to the Board.
Consistent with previous exercises, the 2015 evaluation proved to be
very useful and whilst it was pleasing to note that the exercise concluded
that the Board continues to function very well, inevitably there were some
areas identified for improvement and other areas that would benefit from
additional or continuing focus. I can confirm that the Board has already
focused on these areas and will continue to do so during 2016. More
detail of the 2015 Board evaluation is set out on page 56.
This Report also seeks to explain what your Board of Directors actually
does and describes how it is responsible for setting the culture and
values of the Company, ensuring that the Company is run in the best
interests of its shareholders as well as other stakeholders, and how
it interacts with its shareholders in explaining the Company’s strategic
goals and performance against them. From a governance perspective,
it is not just a case of what is done but also, and just as importantly,
how it is done – therefore, we try and avoid a simple box ticking type
approach, preferring our governance to be something that is properly
embedded in our people, processes and decision making at all levels.
As a Board we regularly review health, safety and environmental
performance; our business strategy; key risks; the market; operational
matters; customer services; human resources; diversity; corporate
responsibility; community engagement; our financial position and
performance; governance and legal matters; and shareholder-related
matters including the make up of our share register. This is done through
the consideration and discussion of regular reports submitted by the
Executive Directors and through other reports and presentations from
our senior management and external advisers. The Board and individual
Directors also undertake regular visits to our regional businesses and
their development sites, which has proved to be both very useful and
very effective.
Appointments and succession
There was one change to the composition of the Board during
2015, when we were very pleased to appoint Humphrey Singer as an
Independent Non Executive Director on 9 December 2015. Humphrey
is the Finance Director of Dixons Carphone plc and brings with him
not just his financial acumen but a number of other skills and experience
such as digital solutions and customer services, which will complement
the Board’s existing skill set. The Board considers that there is an
effective balance with three Executive Directors and five Non Executive
Directors plus myself as Chairman, which ensures that each viewpoint
is properly represented around the Board table. It also ensures that
there is an effective balance of guidance, support and constructive
challenge to the Executive.
The appointment of Humphrey Singer followed a robust search,
assessment and recruitment process, led by the Nomination Committee,
the details of which are set out in more detail on page 59.
The Nomination Committee makes recommendations on appointments
and succession planning to the Board, and more details can be found
in the Nomination Committee Report on pages 58 to 62.
46
47
Governance pages 42-91Strategic Report pages 2-41Financial Statements pages 92-146Shareholder Information pages 147-157
Taylor Wimpey plc
Annual Report and Accounts 2015
Chairman’s Introduction to Corporate Governance continued
www.taylorwimpey.co.uk
Board activities and priorities
Regular items at Board meetings cover the review of Committee activities; detailed
updates on health, safety and environmental matters; reports from the Executive Directors
covering progress towards the Company’s strategic objectives, its financial position and
prospects, customer service, legal and corporate governance matters, and compliance
updates; and shareholder matters including an update from the Company’s stockbroker.
Other topics considered during the year at Board meetings included the following on a
meeting by meeting basis:
February 2015
• Reviewed the draft 2014 Annual Report and Accounts and the Sustainability Report
• Conducted the annual risk review
• Determined the amount of dividends for 2014 and any special dividend for 2015 to
be proposed to shareholders
• Approved the draft Preliminary Announcement of the Company’s full year results
• Established improvement plans arising from the 2014 Board evaluation
April 2015
• Reviewed the draft Interim Management Statement to update shareholders on progress
for the year to date
• Reviewed arrangements for the 2015 Annual General Meeting
• Reviewed scenario planning to assess the robustness of the Company’s strategy
• Detailed review of customer service performance and improvement plans
May 2015
• Received a performance and strategic update on Land and Planning
• Detailed review of the political backdrop and its implications for the Company’s strategy
June 2015
• Received a performance and strategic update from the new Major Developments business
• Considered a report on the external review of the Company’s share dealing and
approval processes
July 2015
• Reviewed the draft half year results announcement
• Determined the level of interim maintenance dividend and proposed special dividend for 2016
• Considered the half year risk review
• Detailed review of progress and plans in employee matters
• Detailed review of the political backdrop and its implications for the Company’s strategy
September 2015
• Received an update on the Company’s strategic plan for 2016-25
• Received a detailed review of shareholder engagement and feedback from the Investor Relations team
• Reviewed plans for the Board evaluation for 2015
October 2015
• Received a presentation on performance and plans in the areas of health, safety,
the environment and sustainability
• Received a presentation on progress and plans in the area of human resources
• Discussion on progress and plans in the areas of diversity and inclusivity
December 2015
• Detailed discussion on the Group’s year end forecast
• Reviewed the outcome of the Board evaluation for 2015 and agreed action points
• Detailed review of the year end risk management report
• Detailed review of the Group Business Strategy 2016-2025
These will all remain key priorities for further
review and development during 2016, and in
particular, succession planning, which is a topic
which will continue to be regularly reviewed by
both the Nomination Committee and the Board.
Additional reporting on the Committee’s activities,
including more details of progress and plans in
each of these areas, in line with the Code, is set
out in the Nomination Committee Report on
pages 58 to 62.
During 2015 the Audit Committee completed
its schedule of work designed to ensure full
compliance with the provisions of Section C
of the Code, in relation to financial reporting
and risk assessment related to the Company’s
operations generally and to the preparation of
this Annual Report and Accounts and the various
confirmations and assurances contained in it for
shareholders. Full details are set out in the Audit
Committee Report on pages 63 to 67. In brief,
the work of the Committee included:
• The following of established processes,
so as to enable it to satisfy itself and
recommend to the Board that the information
presented to shareholders in this Report and
Accounts is, as a whole, a fair, balanced and
understandable assessment of our position
and prospects (see page 67).
• The establishment of robust new processes
to give it the necessary assurance as to the
Company’s financial position and prospects,
to enable the Board to make the new Viability
Statement, set out on page 35 (see pages
63 and 67).
• The ongoing review of the performance
of the external auditor, Deloitte LLP, before
recommending to the Board that a resolution
be proposed for their re-appointment at the
AGM (see page 64).
• The review of risk management and internal
controls so that the Company can closely
monitor its exposure to risks which could
impact upon the future prospects of the
Company and achievement of its strategic
objectives (see page 66).
The Audit Committee has, during the year,
continued to focus closely on these key areas,
and will continue to do so throughout the course
of 2016 as necessary.
The Committee welcomed the new Guidance on
Risk Management, Internal Control and Related
Financial and Business Reporting issued by the
Financial Reporting Council (FRC) in September
2014. The enhanced requirements are
summarised below:
• The design and implementation of appropriate
risk management and control systems and
their ongoing monitoring and review.
48
• The level and nature of risk which the Company is willing to take
in pursuing its strategic objectives.
• The appropriateness of the Company’s culture and reward systems.
• The management and mitigation of Principal Risks.
• The Board’s responsibility for external reporting in these areas.
The Committee believes that these enhanced requirements will further
improve the overall governance framework in these areas. More details
are set out in the Audit Committee Report on pages 63 to 67.
During 2015, the Remuneration Committee has continued its primary
responsibility of ensuring that executive remuneration is geared
to the enhancement of shareholder value and the delivery of the
Company’s strategy within a culture that monitors and limits risk-taking
in accordance with pre-determined limits; and that the rewards for
achieving or exceeding those targets are not excessive. Full details
are set out in the Remuneration Committee Report on pages 68 to 85.
Key areas which the Committee focused on or considered during
the year are set out below:
• Carefully monitored Company performance in relation to the achievement
of its strategic goals, so as to ensure potential and actual reward
available to Executive Directors and the wider executive team was
closely linked to performance measures reflecting those achievements.
• Further aligned employees’ and shareholders’ interests by extending
the participation in the Taylor Wimpey Performance Share Plan to
members of the Company’s regional Business Unit management
teams and further extending shareholding target guidelines below
Board level.
• In conjunction with the Board, further increased participation in the
all-employee share plans and the percentage of employee shareholders.
Due to the fact that there has been no change to the Remuneration
Policy, accordingly there will again be only one resolution on
remuneration proposed at the 2016 AGM – namely, the advisory
vote on the way in which the Policy has been applied during 2015,
as set out in the Remuneration Report on pages 70 to 76.
The terms of reference of each of the Board Committees, including
an explanation of their role and the authority delegated to each by
the Board, appear on the Company’s website www.taylorwimpey.co.uk/
corporate/investor-relations/corporate-governance
Diversity
Diversity and inclusivity has continued to be a key item on the overall
UK governance agenda during 2015, particularly with the publication
of Lord Davies of Abersoch’s review of progress to date in encouraging a
greater proportion of women onto boards. This review sets an enhanced
target for the proportion of women on each FTSE 350 company’s board
to increase from the current 25% target to 33% by 2020. The Board very
much welcomes this initiative and the increased target which is designed
to give greater impetus to the progress of enhanced gender diversity on
PLC boards.
Although the percentage of women on the Board of Taylor Wimpey plc
reduced during the year from 25% to 22% following the appointment
of Humphrey Singer in December 2015, improvements were however
seen in the proportion of women on the Group Management Team
(GMT) which increased to 30% during the year from 25% in 2014.
The number of women on the Board will be kept under regular
review in line with the recommendations made by Lord Davies.
More generally, within Taylor Wimpey, diversity and inclusivity has
remained a key priority on the Board’s agenda and this will continue
to be the case during 2016 for all of our businesses and across all
disciplines. Our ambitions and objectives are set out in our Diversity
Policy which can be found on pages 60 to 61 and more information
can be found on pages 30 to 31 and on the Company’s website:
www.taylorwimpey.co.uk/corporate/investor-relations/corporate-
governance
Full details of our strategy and progress made to date towards the
policy objectives are set out in detail in the Nomination Committee
Report on pages 58 to 62.
Board evaluation
Pursuant to the Code, the Board carries out a formal and rigorous
annual evaluation which is, as mentioned earlier, externally facilitated
at least once every three years.
Following the external facilitation of this process in 2014, the
evaluation in 2015 was conducted internally via a rigorous and
comprehensive assessment of the performance of the Board,
its Committees and each individual Director.
As part of the Board evaluation, the Board carefully considered
the time commitments of all Directors and was satisfied, in line with
the Code, that each Director was able to allocate sufficient time to
discharge his/her responsibilities to the Company effectively including
not only attendance at Board and applicable Committee meetings
(where attendance was 100% during 2015 for all Directors) but also
for preparation time for meetings, visits to businesses (including the
annual Board away day/visit) and other additional requirements that
may be required from time to time.
The annual evaluation is an important part of the Board’s corporate
governance framework and both the process and outcome are
always taken very seriously by the Board, each Committee and
by each individual Director.
Details of this year’s evaluation; its outcome; the actions planned by
the Board during 2016 to address the issues raised; and the actions
taken during 2015 to address the issues raised in the last (externally-
facilitated) evaluation conducted in 2014 and reported in last year’s
Annual Report, are set out on page 56.
KPI
See page 56 for more information
Conclusion
I believe that your Board remains effective and continues to work well.
I am confident that the Board has the right balance of skills, expertise
and professionalism to continue to deliver strong governance whilst
allowing the Executive Directors to implement and deliver the
strategy set out on pages 16 to 17 within a culture of effective risk
management and appropriate levels of reward. I am pleased with
the Board’s activity with regard to corporate governance, but we
continually look for ways to learn and improve. As ever, I very much
look forward to meeting with shareholders at the AGM on 28 April
2016 and, as always, along with all of your Directors (who will all be
present at the AGM), remain available to answer or respond to your
questions, concerns and suggestions at any time.
Kevin Beeston
Chairman
49
Governance pages 42-91Strategic Report pages 2-41Financial Statements pages 92-146Shareholder Information pages 147-157
Taylor Wimpey plc
Annual Report and Accounts 2015
www.taylorwimpey.co.uk
Chairman’s Introduction to Corporate Governance continued
General Board Governance
Adherence to the Code
The Main Principles of the Code and guidance on where to find
details in these reports on how the Company has complied with
it, are set out below:
Section A: Leadership
• Every company should be headed by an effective board
which is collectively responsible for the long term success
of the company (see page 51).
• There should be a clear division of responsibilities at the
head of the company between the running of the board and
the executive responsibility for the running of the company’s
business. No one individual should have unfettered powers
of decision (see page 53).
• The chairman is responsible for leadership of the board
and ensuring its effectiveness in all aspects of its role
(see page 51).
• As part of their role as members of a unitary board,
non executive directors should constructively challenge
and help develop proposals on strategy (see page 51).
Section B: Effectiveness
• The board and its committees should have the appropriate
balance of skills, experience, independence and knowledge
of the company to enable them to discharge their respective
duties and responsibilities effectively (see page 52).
• There should be a formal, rigorous and transparent
procedure for the appointment of new directors to the board
(see page 59).
• All directors should be able to allocate sufficient time to
the company to discharge their responsibilities effectively
(see pages 49 and 53).
• All directors should receive induction on joining the board and
should regularly update and refresh their skills and knowledge
(see page 54).
• The board should be supplied in a timely manner with
information in a form and of a quality appropriate to enable
it to discharge its duties (see page 54).
• The board should undertake a formal and rigorous annual
evaluation of its own performance and that of its committees
and individual directors (see page 56).
• All directors should be submitted for re-election at regular
intervals, subject to continued satisfactory performance
(see page 53).
Section C: Accountability
• The board should present a fair, balanced and understandable
assessment of the company’s position and prospects
(see page 67).
• The board is responsible for determining the nature and extent
of the principal risks it is willing to take in achieving its strategic
objectives. The board should maintain sound risk management
and internal control systems (see page 66).
• The board should establish formal and transparent
arrangements for considering how they should apply the
corporate reporting, risk management and internal control
principles and for maintaining an appropriate relationship
with the company’s auditors (see pages 64 to 65).
Section D: Remuneration
• Executive directors’ remuneration should be designed
to promote the long term success of the company.
Performance-related elements should be transparent,
stretching and rigorously applied (see page 77).
• There should be a formal and transparent procedure for
developing policy on executive remuneration and for fixing
the remuneration packages of individual directors. No director
should be involved in deciding his or her own remuneration
(see page 68).
Section E: Relations with shareholders
• There should be a dialogue with shareholders based on the
mutual understanding of objectives. The board as a whole
has responsibility for ensuring that a satisfactory dialogue
with shareholders takes place (see page 57).
• The board should use general meetings to communicate with
investors and to encourage their participation (see page 57).
Statement of compliance
For the year ended 31 December 2015, the Company
complied with all the provisions of the Code; the Financial
Conduct Authority’s (FCA) Disclosure and Transparency Rules
sub-chapters 7.1 and 7.2 which set out certain mandatory
disclosure requirements; the FCA’s Listing Rules 9.8.6R, 9.8.7R
and 9.8.7AR which include the ‘comply or explain’ requirement;
and the BIS Directors’ Remuneration Reporting Regulations and
Narrative Reporting Regulations. These regulations are publicly
available at:
• The Code can be found at www.frc.org.uk
• The FCA’s Disclosure and Transparency Rules as well as
Listing Rules can be found at www.handbook.fca.org.uk
• The BIS Directors’ Remuneration Reporting Regulations and
Narrative Reporting Regulations can be found at www.gov.uk
• The FRC Guidance on Risk Management, Internal Control
and Related Financial and Business Reporting can be found
at www.frc.org.uk
Taylor Wimpey plc Board
Kevin Beeston
Chairman
Committee members
Kevin Beeston
Chairman
Pete Redfern
Chief Executive
Ryan Mangold
Group Finance Director
James Jordan
Group Legal Director and Company Secretary
Rob Rowley
Senior Independent Director
Kate Barker
Independent Non Executive Director
Margaret Ford
Independent Non Executive Director
Mike Hussey
Independent Non Executive Director
Humphrey Singer(a)
Independent Non Executive Director
(a) Appointed 9 December 2015.
Number of
meetings attended
8/8
8/8
8/8
8/8
8/8
8/8
8/8
8/8
1/1
The Board and its Committees
As at the date of this Report, the Board consists of nine Directors,
namely: the Chairman, three Executive Directors and five Independent
Non Executive Directors. Their names, responsibilities and other details
appear on pages 44 to 45. On 9 December 2015 Humphrey Singer
was appointed to the Board as an Independent Non Executive Director,
after a selection process led by the Nomination Committee as set out
on page 59.
The role of the Independent Non Executive Directors is to offer advice
and guidance to the Executive Directors, using their wide experience
in business and from their diverse backgrounds, details of which are
set out in their biographies on pages 44 to 45 and in the Board diversity
analysis on page 45. They also provide a constructive challenge,
monitoring the overall direction and strategy of the Company; scrutinising
the performance of the Executive Directors; and satisfying themselves
as to the integrity of the financial information made available both to the
Board and to the Company’s shareholders. The Non Executive Directors
also play an important part in the appointment or removal of Executive
Directors and in general succession planning for the Board and other
executive and other management positions below Board level.
The Board met on eight occasions during 2015 and there was full
attendance at all meetings. The Board has considered the number of
Board meetings that take place each year and has concluded that eight
meetings remain appropriate but will keep the number under review.
Additional Board meetings would be convened as and when necessary
and there are also processes in place for approving transactions and
other matters that need approval in between Board meetings.
Directors make every effort to attend all Board and applicable
Committee meetings, as strongly evidenced by the attendance records
over several years. Where, exceptionally, a Director is unable to attend
a meeting, it is Board policy that the Chairman and/or the Group
Legal Director and Company Secretary (the Secretary) will, as soon
as possible, brief the Director fully on the business transacted at the
meeting and on any decisions that have been taken. In addition, the
views of the Director are sought ahead of the meeting and conveyed
to those attending the meeting by the Chairman and/or the Secretary
as appropriate. Details of the attendance of each Director at Board
and Committee meetings are set out in the table opposite and on
pages 59, 64 and 70.
The Board discharges its responsibilities by providing strategic
and entrepreneurial leadership of the Company, within a framework
of strong governance, effective controls and a culture of openness
and transparency, which enables opportunities and risks to be
assessed and managed. In addition, the Board sets the Company’s
strategic aims; ensures that the necessary financial and human
resources are in place for the Company to meet its objectives;
and reviews management performance.
The Board is responsible for the Company’s culture and for defining
and setting the Company’s values and standards, which it does,
amongst other things, through a number of policies and codes of
conduct, and ensures that its obligations to its shareholders and other
stakeholders are clearly understood and met. The Board is led in these
respects by the Chairman, who ensures the Board operates correctly,
setting its culture and, by extension, that of the Company in its
operations and its dealings with all stakeholders.
As also set out in our 2015 Sustainability Report, which will shortly be
available online at www.taylorwimpey.co.uk/corporate/sustainability/
sustainability-reports, the Board is fully committed to providing a safe
place in which our employees and subcontractors can work, and that
our customers can live. We also ensure that all of our sites are developed
to high standards of environmental management. The Board receives
detailed reports on health, safety and environmental matters at each
Board meeting in respect of the Company’s operations in the UK and
Spain. The Company’s detailed carbon reporting, as required by BIS,
is set out on page 29.
Operational management of the Company’s business is undertaken
by the Chief Executive who receives advice from the Group Management
Team (GMT). The GMT is the most senior executive committee and,
in addition to the Chief Executive, consists of the Group Finance Director,
the Group Legal Director and Company Secretary, the three Divisional
Chairmen, the Group HR Director, the Land and Planning Director,
the Managing Director of the Central London business unit and the
Managing Director of the Major Developments business. The GMT
meets monthly and also once each month with the six Divisional
Managing Directors as a wider Group Operational Team.
50
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Governance pages 42-91Strategic Report pages 2-41Financial Statements pages 92-146Shareholder Information pages 147-157 Taylor Wimpey plc
Annual Report and Accounts 2015
General Board Governance continued
The Board also receives regular reports and minutes from the Treasury
Committee, which meets under the chairmanship of the Group Finance
Director, and also comprises the Group Legal Director and Company
Secretary, one of the Divisional Chairmen (who rotate periodically) and
the Group Treasurer. The key responsibilities of the Treasury Committee
are, broadly, to monitor and keep under review the Group’s financial
risks, financial policies, financial facilities, covenant compliance and
insurance programme in the light of current and proposed strategic
and operational requirements.
The following documents are available for review on the Company’s
website at www.taylorwimpey.co.uk/corporate/investor-relations/
corporate-governance:
• Schedule of matters specifically reserved for the decision of the Board.
• Terms of reference of the Board Committees: Nomination, Audit
and Remuneration, which outline their objectives and responsibilities
and define a programme of activities to support the discharge of
those responsibilities.
• Policies covering operational, compliance, corporate responsibility
and stakeholder matters, which are reviewed whenever necessary
to take account of developments in corporate governance,
changes in legislation and revised processes.
All Directors have access to the advice and services of the Secretary.
The Board has an established procedure whereby Directors may take
independent professional advice at the Company’s expense where they
judge it necessary to do so in order to discharge their responsibilities
as Directors.
The Board took advice during the year from Slaughter and May, on
the continued effectiveness of the Company’s procedures for dealing
in the Company’s shares, following which the existing guidance was
refreshed and issued to all restricted employees.
Advice was also received from Deloitte during the year via the Audit
Committee on the significant governance developments during the year.
The Board receives at each meeting a report from JPMorgan Cazenove
(Cazenove) on the sector and the relative performance of the Company’s
share price.
All businesses and employees are expected to operate at all times to
the highest standards of integrity and conduct in all matters concerning
the Group. Accordingly, there is a Code of Business Conduct, which
sets out the standard for individual dealings both internally and externally.
Formal policies have been adopted, which set out the ethical framework
within which all Taylor Wimpey companies are required to undertake
their business – this includes, in line with the Bribery Act 2010, an
Anti-Corruption Policy which requires an annual sign-off by
designated senior management.
These policies are available for review on the Company’s website
www.taylorwimpey.co.uk/corporate/investor-relations/corporate-
governance and relevant reporting against these is provided to the
Audit Committee by the Head of Internal Audit and the Secretary
as appropriate.
The Company welcomes the aims and objectives of the Modern Slavery
Act 2015 and will be taking its future responsibilities under the Act very
seriously. A team has since been established to look at what the
legislation will mean for Taylor Wimpey.
Board and Committee balance, diversity, independence
and effectiveness
A key role of the Board is to ensure that it retains an appropriate level
of independence in order to allow the Independent Non Executive
Directors to challenge the Executive Directors constructively whilst, at
the same time, also supporting them to implement the strategy and run
the business effectively. Another key role is to ensure that it has the right
blend of skill, independence and knowledge and this is something that is
kept under regular review in conjunction with the Nomination Committee.
It is the Company’s policy, in line with the Code, that proposed
appointments to the Board, and succession planning, are based
on merit, and judged against objective criteria, whilst also having
due regard to the benefits of diversity and inclusiveness, including
gender, age, disability, ethnicity, thought and experience. The Board
also continues to recognise and take very seriously its responsibility
to comply with the recommendations of the Davies Report, encouraging
increased participation by women on boards, which was previously
targeted at 25% on FTSE 100 boards by 2015 but more recently
increased to 33% for FTSE 350 companies by 2020, which the
Board welcomes.
Following the appointment of Humphrey Singer in December 2015,
the proportion of women on the Taylor Wimpey Board has reduced
from two out of eight (25%) to two out of nine (22%). The Board will
keep the balance of the Board under regular review and this was also
an action point arising out of the 2015 Board evaluation exercise.
Board and Committee roles and responsibilities
The work of each of the Board Committees (Nomination, Audit
and Remuneration) is described later in this Report.
Relevant skills and expertise
It is a requirement of the Code that the Board and its Committees
should have the appropriate balance of skills, experience, independence
and knowledge of the Company, to enable duties and responsibilities
to be discharged effectively. This was reviewed during the year and
was utilised in drawing up the recruitment framework, including the
list of desired skills in the process used for the appointment of a
new Independent Non Executive Director during the year. The Board
considers that each Director brings relevant and complementary skills,
experience and background to the Board, details of which are set out
below, and additional information is also set out in the biographies on
pages 44 and 45, and also on page 152.
Kevin Beeston, Chairman, has a wealth of commercial, financial
and high level management experience including being a former
CEO of a FTSE 100 company. Kevin also has significant experience
of chairing boards of both public and private companies and of
being a non executive director and sitting on audit, nomination
and remuneration committees.
www.taylorwimpey.co.uk
Pete Redfern, CEO, has operational responsibility for delivering
the Company’s strategy in a profitable, safe and environmentally
responsible manner. Pete has significant financial, operational and
management experience, gained from his various roles in industry
and from his time at KPMG. In 2014 he joined the Board of Travis
Perkins plc as an independent non executive director and serves
on their remuneration committee, which will only add to his breadth
of experience at plc board level.
Ryan Mangold, Group Finance Director, has operational responsibility
for managing the Company’s finances. Ryan has financial, treasury,
risk and financial control expertise including that gained from his
time with Mondi Group and Anglo American plc.
James Jordan, Group Legal Director and Company Secretary,
is a solicitor and oversees compliance with legal and regulatory
obligations and manages the Secretariat and Legal Departments.
James has significant legal, commercial, transactional and regulatory/
governance related experience.
Kate Barker, Independent Non Executive Director, is an industry-
recognised economist and has led policy reviews for the Government
in the areas of land use, planning and housing supply. Kate also brings
a wider economic insight gained through her various roles, including as
a Member of the Oversight Board of the Office for Budget Responsibility.
Margaret Ford, Independent Non Executive Director, has wide-ranging
experience in a number of sectors and also has extensive knowledge
of the property sector, gained through various roles. Margaret has
significant plc experience including the chairmanship of both boards
and board committees. She also sits in the House of Lords.
Mike Hussey, Independent Non Executive Director, has in-depth
expertise in land development and marketing, particularly in London,
gained from his previous roles as a director of Land Securities plc
and as head of leasing and marketing of the Canary Wharf Group plc.
Mike is currently CEO of Almacantar, a property development fund
he founded in 2010.
Rob Rowley, Independent Non Executive Director and Senior
Independent Director, has a wealth of financial, commercial and
management expertise, principally from his time as Finance Director
of Reuters plc and Deputy Chairman of Cable & Wireless plc. Rob has
substantial experience as a non executive director including the chairing
of audit committees and has recent and relevant financial experience
as required by the Code.
Humphrey Singer has a wealth of financial experience as Group
Finance Director of Dixons Carphone plc, and expertise in the
areas of both digital solutions and customer services.
Division of responsibilities
The Board has an established framework of delegated financial,
commercial and operational authorities, which define the scope
and powers of the Chief Executive and of operational management.
In line with the Code, the roles and responsibilities of the Chairman
and the Chief Executive have been clearly defined, set out in
writing and signed by Kevin Beeston and Pete Redfern in their
respective capacities.
Ensuring there is no conflict of interest
In order to assist Directors in complying with their duty to avoid
conflicts (or possible conflicts) of interest, it is standard procedure
that the Board must first give its clearance to such potential conflicts of
interest (which would include directorships or other interests in outside
companies and organisations) following which, an entry is then made
in the statutory register which the Company maintains for this purpose.
Whenever any Director considers that he or she is, or may be, interested
in any contract or arrangement to which the Company is or may be
a party, the Director gives due notice to the Board in accordance with
the Companies Act 2006 and the Company’s Articles of Association.
In such cases, unless allowed by the Articles, any Director with such
an interest is not permitted to participate in any discussions or
decisions relating to the contract or arrangement.
The Board undertakes a regular review of each Director’s interests,
if any, outside of the Company. In addition, all new appointments and
interests of Directors are reported to the Board for consideration or
noting as appropriate. Following these reviews, the Board remains
satisfied that, in line with the Code, all Directors are able to allocate
sufficient time to the Company to enable them to discharge their
responsibilities as Directors effectively and that any current external
appointments do not detract from the extent or quality of time which
the Director is able to devote to the Company. This is further borne
out by Directors’ attendance at Board and Committee meetings,
which has been at or very close to 100% over many years and was
at 100% for 2015.
Annual re-election to the Board
The Code requires every Director to seek election or re-election,
as appropriate, at each year’s Annual General Meeting (AGM).
Accordingly, at the 2016 AGM, every Director, irrespective of the date
of his or her appointment and the length of his or her service on the
Board, will be submitted for election (in the case of Humphrey Singer,
as he was appointed since the last AGM) or re-election (in the case
of the other Directors).
Details of the resolutions to be proposed in this respect and supporting
biographical details of the Directors appear in the Notice of Meeting
on pages 147 to 155.
As part of the 2015 Board evaluation process, the Board reviewed
and re-affirmed that it considers each of the Non Executive Directors
to be independent in character and judgement and that there are
no relationships which could affect the Director’s judgement.
A rigorous evaluation took place with regard to Rob Rowley as
he will have served six years by the time of the AGM in 2016.
In addition the Board re-evaluated each Director’s time commitments,
and was satisfied that they continued to allocate sufficient time to
the Company to discharge their responsibilities effectively, including
not only attendance at Board and applicable Committee meetings
(where attendance was 100% during 2015 for all Directors) but also
for preparation time for meetings, visits to businesses (including the
annual Board away day/visit) and other additional requirements that
may be required from time to time. Recognising the importance of time
commitment to shareholders, this will continue to be kept under review
during 2016 including as part of the annual Board evaluation process.
The Chairman, at the time of his appointment on 1 July 2010,
met the independence criteria as set out in the Code.
52
53
Governance pages 42-91Strategic Report pages 2-41Financial Statements pages 92-146Shareholder Information pages 147-157 Taylor Wimpey plc
Annual Report and Accounts 2015
General Board Governance continued
Information and professional development
The Company has procedures whereby newly appointed
Directors (including Non Executive Directors) receive a formal induction.
This includes training and continuing familiarisation with the Company’s
business, strategy, operations (including health and safety) and systems,
the principles underlying the discharge of their duties as Directors and
wider issues relating to the housing sector. The induction also includes
meetings with key executives and function heads, advisers and site
visits. During 2015, and in response to one of the findings from the
2014 Board evaluation, the existing comprehensive induction process
was given greater formality and is also subject to specific tailoring
for individual Directors as appropriate.
All Directors visit Group operations on a regular basis, engaging with
employees at all levels in order to foster and maintain an understanding
of the business. Board visits are arranged each year to operations
and at least one Board meeting per annum takes place in a regional
business over three days. In 2015, the Board visit took the form of
a strategic review which was also attended by senior management,
which worked well.
The Group Legal Director and Company Secretary acts as Secretary
to the Board and its Committees and he attends all meetings. It is
Board policy that wherever possible a formal agenda and reports are
issued electronically to Directors in respect of all Board and Committee
meetings at least one week prior to the meeting, in order to allow
sufficient time for detailed review and consideration beforehand.
Formal minutes are prepared in respect of all Board and Committee
Board objectives
meetings and are then circulated and submitted for approval at
the next meeting. All Board papers are circulated electronically and
Board meetings have been effectively ‘paperless’ for several years,
which has worked well and aided the overall efficiency of the wider
Board process.
The Secretary provides regular briefings to the Board on regulatory
and governance matters which are included as part of his formal
regular reporting to the Board, and are supplemented, as appropriate,
by briefings from independent advisers. The Board also receives
regular briefings and updates on environmental, social and
governance (ESG) matters.
The ESG briefings allow the Board to assess the significant ESG
risks to the Company’s short and long term value and to identify any
opportunities that may arise to enhance value. Details of ESG risks and
value-enhancement pursuits appear in the Sustainability Report which
will shortly be available on our website www.taylorwimpey.co.uk/
corporate/sustainability
The Chairman, Chief Executive and Secretary meet sufficiently
in advance of each Board meeting in order to ensure action points
from previous meetings have been implemented and to prepare the
agenda and matters to be covered at the next and at future Board
and Committee meetings as appropriate. The agenda and minutes
for the Nomination, Audit and Remuneration Committee meetings
are agreed by the Secretary with the relevant Committee Chairman.
2016 Board objectives
• To ensure the Company’s strategy
remains robust in the light of
any forecast market and wider
economic changes.
• To ensure the Company’s
performance remains on
schedule to achieve the strategy.
• To take all measures to ensure
that health and safety remains
the Group’s top priority and will
remain an ongoing area of focus.
• To ensure risk remains within the
Company’s agreed risk appetite
and is adequately monitored and
reviewed as appropriate to reflect
external and internal changes.
Strategy
and execution
2015 Board objectives
• To set the Company’s
strategic objectives and
strategy for their achievement.
2015 Performance
• The Board reviewed performance to date towards
achieving its strategic objectives and approved a
medium term strategy to further enhance returns.
• To review the Company’s
performance, resourcing,
and achievements affecting
its ability to deliver
the strategy.
• To review and, if necessary,
revise the strategy or its
objectives in the light of
wider economic, financial
and market considerations.
• At each meeting, detailed reports from the
Executive were discussed, reviewing forward
resourcing requirements in the areas of capital,
finance, people and land, and operating decisions
taken or proposed to address them.
• The Board conducted a major review of the
Company’s medium term strategy, together
with more specific reviews in connection with
the preparation of forward budgets and
projections of future performance.
• To ensure the strategy is
• Detailed scenario planning was reviewed,
sufficiently resilient in different
forward-looking scenarios.
together with assessments of the strategy’s
relative robustness in each case.
• To review and agree the
Company’s risk appetite
in seeking to achieve its
strategic objectives.
• To regularly review the
robustness of the Company’s
systems of risk reporting;
assessment; and internal
controls.
• The risk review was conducted twice during the year,
at the Board’s July (half year) and February (full year)
meetings, and covered both the systems used
and the reported risks. At the February meeting
the position was subject to independent check
with external auditor reports on risk processes
connected with the annual audit.
• The Board’s annual risk review for 2015 was
completed at the February 2016 Board meeting
following a process embracing all levels of the
Group’s businesses.
Risk
management
54
Governance
and values
Organisational
capacity
Stakeholder
engagement
September 2014 revision
of the UK Corporate
Governance Code (‘Code’).
• To fully implement any
related governance
requirements, such as the
new Viability Statement.
• To review the remuneration
framework to ensure that
it remains appropriate,
proportionate, and does
not encourage excessive
risk-taking.
• To conduct an annual
Board appraisal.
• To take account of
shareholder guidance
and consultation.
• To ensure that the Company
has the necessary resources
– financial, people, supply
chain and Group structure –
to enable it to deliver the
strategy.
• To ensure that its people
are suitably trained and that
sufficient provision is being
made for succession planning
at all levels.
• To increase shareholder
attendance and voting,
including registering
proxies, at the AGM.
• To keep employees
engaged and informed on
the Company’s performance
and prospects.
• To assist prospective and
actual purchasers of houses
in making and successfully
concluding what is, for
many, the largest value and
potentially most stressful
transaction of their lives.
• To maintain communication
and a culture of continuous
improvement throughout the
Company’s supply chain.
www.taylorwimpey.co.uk
2016 Board objectives
• To ensure that there is continued
full compliance with the Code
and with wider statutory and
regulatory requirements.
• To ensure that remuneration is
to remain within the Company’s
Remuneration Policy and
proportionately rewards
achievement of the strategy.
• To implement the improvements
identified on page 56 arising
from the 2015 Board appraisal.
• Monitor shareholder feedback
and continue to actively promote
wider engagement.
2015 Board objectives
• To fully implement the
2015 Performance
• The Company embraced the key requirements
of the revised Code in its 2014 reporting and has
now fully complied in all respects, as was required
for this 2015 reporting year.
• The Code requirement for the introduction
of a Viability Statement has been met by the
inclusion of the Statement on page 35.
• The Company’s Remuneration Policy remains
unchanged since its adoption by shareholders
at the 2014 AGM but is reviewed, with advisers,
by the Remuneration Committee each year to
ensure it remains appropriate and proportionate
and helps to drive and reward achievement of
the strategy.
• The appraisal was conducted internally for 2015
as reported on page 56 (having been externally-
facilitated, as required at least each third year,
in 2014).
• In addition to the AGM, shareholder and
institutional feedback was sought when presenting
the Company’s half year and full year results and
in notifying proposals for remuneration during 2015,
and taken into consideration by the Board together
with advice from its stockbroker.
• The Board reviewed reports at each meeting on
• To ensure that resourcing
the financial performance of the Company and the
availability, currently and forecast going forward,
of financial, people and supply chain resourcing.
• The Board and the Nomination Committee reviewed
at least twice each year the strategy for succession
planning and related training assessment and
provision, and progress in achieving it.
remains sufficient to achieve
the strategy together with wider
diversity considerations.
• To ensure that training and
development plans support
continuous improvement in the
team and contribute towards
wider diversity improvements.
• Shareholder communication was conducted
through encouraging attendance at the AGM;
steadily increasing voting on resolutions proposed
thereat; briefings to analysts and the press; and
direct consultation on certain special matters.
• Employee involvement was promoted through
regular briefing material online and in hard copy;
interactive online Q&As; strategy updates around
the businesses; and explanation of Company
performance around half year and full year reporting
and trading statements.
• Prospective and actual purchasers of houses
were assisted by dedicated teams in each regional
business along each stage of the Customer Journey.
• The supply chain received constant feedback
from Group businesses, suppliers and
subcontractors, which fed into updated
arrangements and agreements.
• To actively encourage
shareholder participation
through clear messaging and
reporting and careful review
of shareholder feedback.
• To implement changes
proposed following the
employee consultation
conducted during 2015.
• Monitor the embedding of the
Customer Service improvements
introduced during 2015 and 2016.
• To ensure the Group works
with subcontractors and
suppliers to constantly seek
ways of further improving quality;
sustainability; and delivery in a
safe working environment.
55
Governance pages 42-91Strategic Report pages 2-41Financial Statements pages 92-146Shareholder Information pages 147-157 Taylor Wimpey plc
Annual Report and Accounts 2015
General Board Governance continued
www.taylorwimpey.co.uk
Board evaluation
The outcome of the 2014 Board evaluation (which was externally
facilitated, in line with the requirement of the Code that this be
undertaken in this way at least every third year) was reported on
in detail in last year’s Corporate Governance Report. The main
action points arising from that exercise, and action taken in
respect of each, are set out in the table below.
As previously mentioned, the 2015 Board evaluation was
internally facilitated, as set out on page 46.
The 2015 evaluation process consisted of the following:
• A detailed and comprehensive bespoke questionnaire which
the Secretary sent individually to all Directors for completion.
• Collation of the responses by the Secretary.
• Review by the Chairman and the Secretary of each performance area,
and of each Director.
• Presentation of the findings to the Board on a non-attributable basis.
• Preparation of action plans designed to address the findings,
as set out in the table below, during 2016.
Feedback was then provided on an individual basis, by the Senior
Independent Director to the Chairman (and vice versa); and through
the Chairman discussing each individual Director’s own performance
assessment with the relevant Director on a one-to-one basis.
The recommendations arising from the Board evaluations for 2014
and 2015, together with actions taken during 2015 in relation to
the former, and actions planned during 2016 in relation to the latter,
are set out in the table below.
2014 Evaluation – Recommendations included
Actions taken during the year
Refreshing the current strategy; adding scenario planning; adopting
a longer term focus; and further explanation and communication
to the team.
Continuing focus on succession planning, particularly longer term,
with closer links to talent management and training, and including
for Board Committee Chairmen.
Greater formality around Board induction and specific tailoring
for Executive and Non Executive Directors.
This was addressed during 2015 by a comprehensive review of the
strategy conducted by senior executives; review by the Board on
several occasions during the year, culminating in a detailed review
at its October meeting including scenario planning outcomes;
formal adoption of the revised strategy at its December meeting;
and arrangements made for a ‘roadshow’ around the businesses
during 2016 to communicate and explain it to the team.
This was addressed during 2015 by the extension of the Talent
Management Group through establishing such a Group in each
of the three Divisions of the UK Housing business, linked to reviews
of training and professional development requirements and plans,
feeding recommendations upwards for review and monitoring
of progress. In addition, the Nomination Committee drew up
Succession and Contingency Plans for the Non Executive
Directors and Board Committees.
This was addressed during 2015 by the re-design of the Board
induction process, timetable and documentation, with bespoke
additions of relevant areas tailored to Executive and Non Executive
Directors. Consideration is also being given to expanding this into
Regional Boards around the UK business.
2015 Evaluation – Recommendations included
Actions to be taken during 2016
Additional periodic reporting to take place on key areas such as
land and planning; marketing-related initiatives; and the Major
Developments business.
Additional reporting to the Board on these areas of the business
will take place.
Greater alignment of reporting on the three Housing Divisions.
Alignment of reporting has already been implemented.
Additional focus to take place on diversity and inclusivity including
continued monitoring and review.
There will be increased focus on diversity and inclusivity initiatives
at all levels of the business including at Board level.
The inclusion of special topics for presentation to the Board and
to make structural changes to the Board away day.
A programme of special topics and presenters has been
compiled. Improvements to the Board away day structure
will also be implemented so as to maximise the time the Board
spends together.
Each of these key areas will remain firmly on the Board’s agenda
during 2016 and an update will be provided in the 2016 Annual
Report and Accounts.
Management
Progress in achieving the Group Strategy is reviewed at each Board
meeting and is reported on pages 16 to 17. The Chief Executive has
responsibility for preparing and reviewing strategic plans for the Group
and the annual budgetary process. These are subject to formal approval
by the Board.
Budgets are re-examined in comparison with business forecasts
throughout the year to ensure they are sufficiently robust to reflect the
possible impact of changing economic conditions and circumstances.
The Chief Executive and the Board conduct regular reviews of actual
results and future projections with comparison against budget and prior
year, together with various treasury reports. Disputes that may give
rise to significant litigation or contractual claims are monitored at
each Board meeting, with specific updates on any material
developments or new matters presented by the Secretary.
The Group has clearly defined policies, processes and procedures
governing all areas of the business, which will continue to be reviewed
and refined in order to meet the requirements of the business and
changing market circumstances. Defined authority limits continue
to be closely monitored in response to prevailing market conditions.
Any investment, acquisition or significant purchase or disposal of land
requires detailed appraisal and is subject to approval by the Board
or the Chief Executive, depending on the value and nature of the
investment or contract.
There is a clearly identifiable organisational structure and a framework
of delegated authority approved by the Board within which individual
responsibilities of senior executives of Group companies are identified
and can be monitored. The Operating Framework, within which
delegated authorities, responsibilities and related processes are explained
in detail, is available for review and guidance online by any employee
through the Company’s intranet. These activities are reinforced through
process compliance and other audits conducted by Internal Audit.
The annual employee performance appraisal process is objective-based,
with individual objectives cascaded down from the appropriate business
objectives. The process also identifies training needs to support
achievement of objectives.
During 2015 the Group’s control environment was further enhanced
both through the full implementation of the September 2014 update
of the Code and also a robust risk assessment and review led by the
Audit Committee. In addition, an independent review was conducted
of the effectiveness of Internal Audit and of the Group’s strategic risk
review process.
This 2015 Annual Report and Accounts
Your Directors have responsibility for preparing this 2015 Annual Report
and Accounts and for making certain confirmations concerning it. In
accordance with the Code provision C.1.1 the Board considers that,
taken as a whole, it is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Company’s
position, performance, business model and strategy.
The Board was able to reach this conclusion, and also received advice
from the Audit Committee. The processes of review and assessment
followed by that Committee in that respect, are set out on page 67.
The Viability Statement, introduced for the first time this year in line
with the September 2014 revision of the Code, appears on page 35.
Shareholder engagement
The Board actively seeks and encourages engagement with major
institutional shareholders and other stakeholders and supports
the initiatives set out in both the Code and the Stewardship Code,
which aim to foster a more proactive governance role by major
shareholders. The Board has put in place arrangements designed
to facilitate contact with shareholders concerning business,
governance, remuneration and other issues. This provides the
opportunity for meetings with shareholders and the Chairman, the
Senior Independent Director as well as the Chief Executive, Group
Finance Director, Group Legal Director and Company Secretary
and other executives as appropriate, in order to establish a mutual
understanding of objectives. The Company also operates a
structured programme of investor relations, based on formal
announcements and publications covering the full year and half
year results. In addition, the Chairman meets with the Company’s
institutional shareholders from time to time, both proactively
and upon request, in order to discuss the Company and its
performance, governance and remuneration policies. As set
out in the Remuneration Report, the Remuneration Committee
undertakes a consultation exercise each year and as part of
this exercise, the Committee Chairman also engages directly
with shareholders and their representative bodies.
All Directors receive formal reports and briefings during the year
about the Company’s investor relations programme and receive
detailed feedback through surveys, direct contact and also other
means. This enables all Directors to develop an understanding
of the views of major shareholders about the Company.
The Board encourages all shareholders to participate in the
Annual General Meeting, which is attended by all Directors.
Shareholders’ attention is drawn to the Notice of Meeting
on pages 147 to 155 which sets out details of the rights of
shareholders in connection with the notice of, and participation
in, general meetings of the Company. This year, there are
23 resolutions being submitted for shareholder consideration,
including, Resolutions 20 to 22 which are requests for approval
of substantial property transactions as defined in the Companies
Act 2006, between the Company and Pete Redfern and
Ryan Mangold.
For the 2015 AGM, shareholders representing 61% of the
Company’s issued share capital voted in the poll. There was a
vote in favour of 16 of the 20 resolutions of in excess of 99% and
an average vote in favour across all 20 resolutions of over 98%.
Information about the Company, including full year and
half year results and other major announcements, and additional
information about shareholder facilities, is published on the
Company’s website www.taylorwimpey.co.uk/corporate
Delivering
quality for all
our stakeholders
Sustainability Report 2015
56
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Governance pages 42-91Strategic Report pages 2-41Financial Statements pages 92-146Shareholder Information pages 147-157 Taylor Wimpey plc
Annual Report and Accounts 2015
Nomination Committee Report
www.taylorwimpey.co.uk
Main objective
• To ensure there shall be a formal,
rigorous and transparent process
for the appointment of new Directors
to the Board, its Committees and to
other senior roles and in conjunction
with the Board to ensure effective
diversity improvements and
succession planning processes
across the Group
2015 Performance
• With the Diversity and Inclusivity
Working Party, which was set up in
2014, now up and running, progress
has been achieved in these key
areas – although there is still a lot of
work to be done in order to achieve
the Company’s diversity policy and
wider diversity and inclusivity strategy
• Reviewed the Board structure, its
skill sets, succession and contingency
planning and recruited a new
Independent Non Executive Director
• Finalised contingency and longer-term
succession planning for all senior
roles across the business, linked
to talent development and
targeted training programmes
• Formalised the induction process in
place for newly appointed Directors
2016 Objectives
• To further progress the diversity
and inclusivity agenda across
the business, including partnering
initiatives with selected third parties
• Monitor the developing requirements
for reporting any gender pay gap
and ensure processes and controls
are in place to facilitate any necessary
reporting in that area
• Given their importance, to ensure that
the succession and contingency plans
are regularly reviewed and updated
I am pleased to be able to take this opportunity as Chairman of the Nomination Committee
to summarise the important ongoing objectives and responsibilities of the Committee; the
work that has been carried out during 2015; and its plans for the coming year.
The Committee’s key objective is to support the Board in fulfilling its responsibilities to ensure
that there is a formal, rigorous and transparent process for the appointment of new Directors
both to the Board and to senior management positions, and to ensure that effective succession
planning and contingency planning processes are in place across the Group.
In meeting its objectives, both the Committee and the Board take into account diversity
including gender and fully support the various Government initiatives in this key area, including
the latest proposals from Lord Davies of Abersoch that the proportion of women on the boards
of FTSE 350 companies should increase from 25% to 33% by the end of 2020. Diversity and
inclusivity remains very much on the Taylor Wimpey agenda with regular reporting now taking
place including a specific annual update and discussion.
During 2015, I and three female colleagues from the business were delighted to attend
and participate in the Women on Boards Conference held by the Department for Business
Innovation and Skills, as this was aimed at increasing the number of women considered
for appointment to FTSE 350 boards. We were also pleased to support a number of other
leading initiatives which are set out in more detail in this Nomination Committee Report.
The Committee’s objectives, the strategy for delivering them, progress made towards them
during 2015 and targets and plans for 2016 are described in more detail in this Report.
The Committee’s achievements during 2015 and its plans for 2016 are set out on the left.
Key priorities are to:
• Continue to focus on succession planning across the Group.
• Drive the Company’s diversity and inclusivity agenda at all levels of the Group.
• Regularly review our succession and contingency planning across the Group, and ensure
that there is a clear link to individuals’ career development and professional development.
The Committee will continue to focus on ensuring that the present and future composition
of the Board and the Group’s executive management is appropriate for the delivery of the
Group’s strategy and that all relevant UK Corporate Governance Code (the ‘Code’)
requirements continue to be met.
Succession planning, together with people development and diversity
and inclusivity, are top business priorities, which we will keep at the
heart of our agenda.
Kevin Beeston
Chairman of the Nomination Committee
Nomination Committee
Committee members
Kevin Beeston (Chairman)
Kate Barker
Margaret Ford
Mike Hussey
Pete Redfern(a)
Rob Rowley
Humphrey Singer(b)
Number of meetings attended
2/2
2/2
2/2
2/2
0/2
2/2
0/0
(a) Stood down from the Committee on 1 January 2015.
(b) Appointed on 9 December 2015.
The Committee is chaired by the Chairman of the Board and is
composed of a majority of Independent Non Executive Directors as
required by the Code. Its members are set out in the table above. Pete
Redfern (Chief Executive) stood down from the Committee with effect
from 1 January 2015, such that the Committee is now comprised of
the Chairman and all Independent Non Executive Directors who are
members of the Board.
The Committee has procedures in place with regard to maintaining
a formal, rigorous and transparent process for Board appointments,
ensuring that appointments to the Board are made on merit and
assessed against objective criteria. The Committee guides the Board
in regularly assessing whether there is an appropriate balance of
expertise and skills on the Board and other diversity considerations,
whilst also having regard to the 2011 report from Lord Davies of
Abersoch on Women on Boards (the Davies Report) and the 2015
Report which raised the target from 25% to 33% by the end of 2020.
A description of how appointments are typically made to the Board
is set out below and this was followed in connection with the recent
appointment of Humphrey Singer to the Board as an Independent
Non Executive Director on 9 December 2015.
The Committee oversees on behalf of the Board, and advises the
Board on, the identification, assessment and selection of candidates
for appointment to the Board. The Committee has a formal, rigorous
and transparent process against objective criteria. The process
of appointment of Humphrey Singer, prior to the decision of the
Board, included:
• The engagement of independent recruitment consultants,
JCA Group, who have no other connection to the Company.
• The preparation of a ‘long list’ of potential candidates which
took into account diversity considerations and the outcome
of the Committee’s latest review of the composition and skill
sets of the Board.
• The selection of a ‘short list’ of suitable candidates meeting
the Committee’s criteria.
• Interviews of those candidates by the Chairman, CEO, Group
Finance Director and Secretary.
• Following selection of the proposed candidate, interviews
with the remaining members of the Board and the taking
up of detailed references.
The Nomination Committee also guides the Board in assessing from
time to time whether the Board has the correct balance of expertise
and in arranging orderly succession planning for appointments to
the Board and in respect of senior management across the Group.
As highlighted in the Committee’s 2015 performance (opposite), the
work of the Committee during the year focused strongly on progressive
succession planning at all senior levels of the Company with a view to
identifying key prospects and tailoring training and development plans
to allow them to demonstrate their potential for future progression.
As part of this process, management below Board level is regularly
provided with access to the Board, including the opportunity to attend
Board meetings and other Board related functions in order to give
presentations on specialist topics, project work and the performance
of specific Business Units and Divisions. This helps to provide valuable
exposure to the Board for up and coming management as well as
being extremely valuable for Board members.
The Committee meets formally at least twice a year. During 2015,
in addition to driving the recruitment of an additional Independent Non
Executive Director, the Committee’s principal agenda items consisted
of: longer term succession planning, reviewing and approving the key
persons contingency plan and considering progress on diversity across
the business. Wider succession planning and diversity remained on
the Board agenda regularly throughout the year.
In addition, and in line with the Code, the Chairman and the Senior
Independent Director, independent of each other, hold meetings at least
annually with the Non Executive Directors without the Executive Directors
present. The Chairman also liaises closely each year with each Director
as part of the annual Board evaluation process.
Appointments and succession planning
It is the Company’s policy, in line with the Code, that proposed
appointments to the Board, and succession planning, are based
on merit, and judged against objective criteria, whilst also having due
regard to the benefits of diversity and inclusiveness, including gender,
age, ethnicity, thought and experience. Following the appointment of
Humphrey Singer as an Independent Non Executive Director during the
year, the Board now consists of nine Directors, two of whom are women,
representing 22% of the Board. The Board fully supported the 25%
target established by the Davies Report and also fully supports the
increased target going forward of 33% by 2020. The Board aspires
to increase the current level of representation to at least 25% and will
also work towards achieving the higher target of 33% by 2020, whilst
continuing to also have due regard to other aspects of diversity as
outlined above.
The Committee also reviews the time commitments of each Director
both prior to all appointments and periodically so as to ensure that
all Directors can discharge their responsibilities effectively.
During the year, we have increased our emphasis on succession
planning for people at all levels of the organisation. As part of this,
both the Board and the Nomination Committee have visibility of a
wide range of employees with leadership potential together with their
individual development plans. Each Divisional Chairman of the housing
business chairs a divisional Talent Management Board (TMB) comprising
senior executives of the Division together with HR representatives.
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Annual Report and Accounts 2015
Nomination Committee Report continued
Each TMB then makes recommendations to the Group Talent Board
which is chaired by the Chief Executive. These Boards regularly review
succession planning and related development and training requirements
across the UK Group. Further actions to support succession planning
include the development of career paths linked to experience, exposure
and education; an assessment and development centre; and the
promotion of the Company’s mentoring scheme. We are also focusing
upon recruiting individuals from a wider range of backgrounds,
experience and industries at all levels.
During 2015, our UK management structure was reviewed and resulted
in the appointment of two new Divisional Chairmen, both through internal
promotion. This restructuring will facilitate improved operational control,
better targeting of capital allocation, and a wider talent pool with great
potential for further development.
Succession planning remains a key area of focus across all levels of the
organisation. During the year, the Committee considered in detail short
and long term succession planning for Directors and key executives,
together with appropriate development plans. The Group Management
Team (GMT) regularly reviews the Company’s succession plans and
talent pipelines, with further action to support these areas continuing.
The Committee also oversaw the establishment of contingency and
longer term succession planning for all senior roles, linked to talent
development and targeted training programmes. The Committee notes
the publication by the Financial Reporting Council (FRC) of consultation
around this area and will be monitoring developments carefully.
There was one change in the composition of the Board during 2015,
namely, the appointment of Humphrey Singer on 9 December 2015.
Humphrey brings considerable experience and expertise in the areas
of finance and due to his background, also in other areas such as
digital solutions and customer services and will therefore enhance
the overall skill sets of the Board. On his appointment to the Board,
Humphrey joined the Nomination Committee, and the Audit Committee
where his experience, including from his current role as Group Finance
Director of Dixons Carphone plc, will be of considerable benefit.
The composition and performance of the Board and its Committees
were considered during the year and it was concluded that the
Board and each Committee continues to function effectively.
The Committee believes that the balance of the Board, consisting
of a Chairman, three Executive Directors and five Independent
Non Executive Directors, recently augmented by Humphrey Singer’s
additional skill set, will continue to provide the right blend of experience,
expertise and challenge in order to take the Company forward in line
with its strategy whilst ensuring and maintaining good governance
and best practice. This will however be kept under regular review
in line with the guidance set out in the Code.
At the Annual General Meeting of the Company to be held on 28 April
2016 (AGM), all Directors will again be subject to re-election or, in the
case of Humphrey Singer, to election, by shareholders in accordance
with the Code. Biographical details of each Director can be found
on pages 44 to 45.
Diversity policy
The Board remains committed to the belief that embracing diversity
and inclusion will enable it to succeed better through a workforce
that is more creative and innovative. The Board has adopted a policy
on diversity which is set out on page 62 and is also available on the
Company’s website at www.taylorwimpey.co.uk/corporate/investor-
relations/corporate-governance
The Company continues to seek to actively embrace the business
and local communities in which it operates and will strive to reflect
their richness and character so as to include such aspects as
gender, race and religion – and also diversity of thought,
background and experience.
The Company is also committed to ensuring that our people are free
from any direct or indirect discrimination, harassment, bullying or any
other form of victimisation. Our grievance and harassment policies
ensure that any reported incidents are investigated. In addition, our
whistleblowing policy encourages employees to speak up, including
through an independent ‘Safecall’ telephone facility, against any
inappropriate practices or behaviour and we regularly publicise the policy
to all staff and workers on site. Due to the importance of whistleblowing,
this policy, and the Company’s processes for addressing matters raised
under it, was independently reviewed during 2015 and was found to be
operating well – some improvements in process and documentation
were recommended and these are being implemented.
Diversity and inclusion remained an area of clear focus throughout
2015 which will continue into 2016 and for future years. A Working Party
which includes a variety of members from across the business has been
established to create a diversity and inclusion strategy and to implement
new initiatives so as to improve our performance in these key areas.
The strategy will focus on the challenges faced in developing an inclusive
and diverse workforce. This includes working with specialist external
bodies to maximise all opportunities, including:
• Developing our policy and both raising and meeting the expectations
from our employees.
• Enhancing our awareness training programme.
• Improving how we attract and recruit candidates to enable
us to succeed through a workforce that is inclusive, creative
and innovative.
During 2015 a number of key activities have taken place:
• The Working Party undertook several activities all aimed at better
embedding a diversity and inclusivity culture within Taylor Wimpey.
Specialist independent consultants were engaged to work with the
Company with the aim of reviewing and assessing our current practices
(Phase 1 of our diversity and inclusion strategy); to develop practical
strategies and action plans (Phase 2 of the strategy); with a view
to rolling out education and training modules to all of the Group’s
business units in 2016 (Phase 3 of the strategy).
www.taylorwimpey.co.uk
• As part of the Review/Assessment phase (Phase 1) of the strategy,
approximately 250 employees were engaged in several activities
including one to one interviews, focus groups, and unconscious bias
tests. The data from these activities is currently being assessed and
will help to influence our action plans and relevant training modules
during 2016.
The Board believes that by embracing diversity and inclusiveness,
the Company will better understand how people’s differences and
similarities can be utilised for the benefit of not only the Company but
most importantly also for individuals and society as a whole. It is the
Board’s view that having a diverse workforce will improve the Company’s
ability to deliver its strategy; the homes that it builds; and its services.
Diversity has continued to be a key item on the overall UK governance
agenda during 2015. Within Taylor Wimpey, diversity has remained
a key priority for the Board’s agenda and this will continue to be the
case during 2016. Although the Board will continue to appoint on merit,
we recognise that boards will generally perform better when they include
top quality people from a range of backgrounds and perspectives.
Diversity will continue to be a key consideration when contemplating
the composition and refreshing of the Board and indeed our senior
and wider management.
As noted opposite, during 2015 the Company put in place systems
to measure and monitor diversity around the Group more effectively.
With regard to gender, as at 31 December 2015:
• The Board consisted of nine Directors, two of whom are
women (22%).
• The GMT, which is effectively the executive Board of Taylor Wimpey
UK Limited, our main operating company, consisted of 10 executives,
three of whom are women (30%).
• There is one woman out of 24 Regional Managing Directors (4%).
• Women across the Group account for 32% (2014: 32%)
of the workforce.
• 27% (2014: 29%) of new starters with the Company during 2015
are women.
While we are making reasonable progress, we of course recognise
that we still have more work to do in order to fulfil our overall diversity
ambitions and, as stated on page 58, it is a priority for 2016 to
achieve further progress in this area.
• We have engaged with the Leonard Cheshire Disability Change 100
Programme, a charitable initiative which provides talented disabled
students with the opportunity to participate in a summer internship
and professional development programme of 100 days’ work
experience. We fully intend to engage with the Programme further
during 2016.
• We have also engaged with the Career Transition Partnership which
is a Ministry of Defence led initiative aimed at providing resettlement
services for UK armed forces personnel as they transition to
civilian life.
• We have continued to promote our ‘Employer of Choice’ and
diversity agenda through numerous publications and have attended
meetings involving the Royal Institute of Chartered Surveyors,
Disability Confident, Stonewall, Women in Property, the Men as
Change Agents Working Group and participated in the Royal Institute
Of British Architects’ ‘See Me Join Me’ campaign aimed at increasing
the appeal of our industry to women.
• We continue to actively work with our recruitment partners to ensure
they understand and embrace our diversity and inclusion agenda.
• We recruited 98 apprentices (2014: 99), including 29 site management
apprentices, 22 management trainees (2014: 50) and 19 graduates
(2014: 19). We remain on target with the recruitment of our site
management apprentices.
• We increased the number of employees with disabilities recruited.
Working with key partners we hope to increase more permanent
and secondment opportunities for people with disabilities.
• We introduced a new HR Information System which we believe will
better capture data relating to all aspects of diversity and inclusion
which will assist us with the management and monitoring of our
strategy going forward.
• We continued to engage with a number of specific diversity partners
in 2016 with an objective to drive the attraction and development
of a more diverse and representative workforce.
• We continued the diversity discussion group meetings with the
Chief Executive, Group HR Director and different sections of the
workforce; to further embed diversity and inclusiveness at all levels
of the Company.
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Annual Report and Accounts 2015
Nomination Committee Report continued
Audit Committee Report
www.taylorwimpey.co.uk
Progress of our diversity policy
The Company’s plans and progress in implementing its diversity policy, benchmarked against appropriate targets, are set out below.
Progress is measured and monitored by the Nomination Committee and the Board.
Diversity policy
Strategy
Progress
Taylor Wimpey operates in
diverse communities. We believe
that embracing this diversity
will enable us to succeed
through a workforce that is
inclusive, creative and innovative.
Diversity covers many aspects.
We have defined diversity
to mean that we actively
embrace the business and
local communities in which we
operate and will strive to reflect
their richness and character to
include such aspects as gender,
race, disability and religion
but also diversity of thought,
background and experience.
Managing diversity is about
valuing everyone as an
individual – valuing people
as our employees, customers
and clients. People have different
needs, values and beliefs. Our
people management practice
demands that employment
propositions are both
consistently fair but also
flexible and inclusive in ways
that assist our people while
supporting our business
needs and objectives.
We believe that everyone
should have the right to equal
access to employment and,
when in our employ, to equal
pay and access to training
and career development.
We will examine our culture and
practices to determine what further
actions can be taken to improve
diversity and inclusion within
Taylor Wimpey.
The Working Party undertook several activities all aimed at embedding a diversity and inclusivity
culture within Taylor Wimpey. Specialist consultants were engaged to work with us with the aim
of reviewing and assessing our current practices (Phase 1 of our diversity and inclusion strategy)
to develop practical strategies and action plans (Phase 2 of the strategy) with a view to rolling
out education and training modules to all of the Group’s business units in 2016 (Phase 3 of
the strategy).
As part of the Review/Assessment Phase of the strategy approximately 250 employees were
engaged in several activities including one to one interviews, focus groups, and unconscious
bias tests. The data from these activities is being assessed and will help to influence our
action plans and relevant training modules during 2016.
We will identify people
management practices that
assist a diverse workforce
to achieve their full potential.
We have engaged with the Leonard Cheshire Disability Change 100 Programme, a charity that
provides talented disabled students with the opportunity to participate in a summer internship
and professional development programme. Feedback from the students thus far has been
positive and we intend to engage with the programme further during 2016.
We will use our Community
Engagement Programme
to heighten awareness of personal
interaction and valuing individuals.
We will increase the opportunities
for young people to join the
Company and will promote
continuous personal development.
We have also engaged with Career Transition Partnership, which is a Ministry of Defence led
initiative aimed at providing resettlement services for UK armed forces personnel as they
transition to civilian life.
We have continued to promote our ‘Employer of Choice’ and diversity agenda through numerous
publications and have attended meetings involving the Royal Institute of Chartered Surveyors,
Disability Confident, Stonewall, Women in Property and participated in the Royal Institute Of
British Architects’ ‘See Me Join Me’ campaign aimed at increasing the appeal of our industry
to women.
We will ensure that all managers
involved in recruitment and
selection receive training that
incorporates the areas of diversity
and promoting equality.
We will extend our recruitment
sources in order to attract a more
diverse range of applicants.
We continue to work with our recruitment partners to ensure they understand and embrace
our diversity and inclusion agenda.
We recruited 98 apprentices (2014: 99), including 29 site management apprentices,
22 management trainees (2014: 50) and 19 graduates (2014: 19). We remain on target
with the recruitment of our site management apprentices.
There was an increase in the number of employees with disabilities recruited. Working with
key partners we hope to increase more permanent and secondment opportunities for people
with disabilities.
We introduced a new HR Information System which we believe will better capture data relating
to all aspects of diversity and inclusion.
We continue to partner with a number of specific diversity partners in 2016 with an objective
to drive the attraction and development of a more diverse and representative workforce.
Continue the diversity discussion group meetings with the Chief Executive, Group HR Director
and different sections of the workforce; to further embed diversity and inclusiveness at all levels
of the Company.
We are committed to ensuring
that our people are free from any
direct or indirect discrimination,
harassment or bullying. We will
not tolerate any behaviour that
detracts from this.
We will encourage our people to
speak out and report any direct or
indirect discrimination, harassment
or bullying. We will act promptly
in addressing any inappropriate
behaviour or practice.
A specific focus of the Company’s whistleblowing campaign is on diversity, encouraging
employees to speak up against any inappropriate practices or behaviour.
Our grievance policy ensures that any reports of harassment or bullying are investigated
and acted upon.
Diversity will be promoted from
the highest level and we will ensure
that our people understand the
benefits of having a diverse and
inclusive workforce.
Diversity is a core message within our strategy; a main item at our Executive and
Regional Management meetings; and is a standing agenda item at GMT meetings.
The next stage of the improvement initiative, which commenced in November 2015, is to
use the data gathered from our research as the basis for the development phase, which will
further develop the Company’s strategy in these areas and identify the key actions to drive
the project forward during 2016.
We acknowledge that we must
continue to promote diversity in
order to create an organisation
that attracts, supports and
promotes the broadest range
of talent. Establishing an
organisational culture with
diversity as a core value will
enable individuals to reach their
full potential and provide the best
service to our customers.
62
Main objective
• To assist the Board in fulfilling its
corporate governance responsibilities
relating to the Group’s risk management
and internal control framework; internal
audit process; financial reporting
practices; external audit process;
and whistleblowing procedures
2015 Key achievements
• Fully implemented, and ensured
compliance with, the additional
requirements introduced in the
September 2014 update of the
Code, including oversight of the design
and implementation of processes and
controls designed to permit the Board to
make the new Viability Statement which
appears on page 35
• Oversaw the latest external evaluation
of the Internal Audit function and
strategic risk review processes to ensure
effectiveness and ability to support strong
controls and governance across the Group
• Considered the Group Fraud Risk
Assessment to ensure appropriate
measures remain in place
• Ensured the continuing robustness
of the risk management framework to
changes in the operating environment
2016 Key areas of focus
• Monitor the implementation of IT
initiatives, particularly in the area
of cyber security
• Monitor the implementation of
the new Group consolidation and
reporting system
• Oversee the implementation of initiatives
relating to the effectiveness of both the
Internal Audit function and the Risk
Management Framework
These are explained in detail in the
Committee Chairman’s Letter to
Shareholders opposite.
I am pleased to be able to take this opportunity as Chairman of the Audit Committee to
summarise the ongoing responsibilities and objectives of the Committee; the work that
has been carried out during 2015; and the priorities established for 2016.
The Committee supports the Board in fulfilling its corporate governance responsibilities
relating to the Group’s risk management and internal control framework; internal audit process;
financial reporting practices; the preparation and compliance of the Company’s Annual Report
and Accounts; external audit process; and whistleblowing procedures.
The terms of reference of the Audit Committee, which are summarised on page 64, reflect its
responsibilities under the UK Corporate Governance Code (the ‘Code’), and related regulations.
The Committee conducts an annual evaluation of its performance against its key objectives.
The evaluation for 2015 was formally assessed by the Committee at its February
2016 meeting.
During 2015 the Audit Committee:
• Reviewed processes designed to meet new governance requirements, namely:
− Fully implemented, and ensured compliance with, the additional requirements
introduced in the September 2014 update of the Code and continued to support the
Board in ensuring that the requirements of the Code, especially provision C1, are met.
− Oversaw the design and implementation of processes and controls designed to permit
the Board to make the new Viability Statement which appears on page 35.
− Undertook an assessment of the effectiveness of the external audit process.
− Oversaw the design and implementation of robust processes to meet the requirements
of the Guidance On Risk Management, Internal Control And Related Financial
And Business Reporting issued by the Financial Reporting Council (the FRC)
in September 2014.
• Oversaw the external evaluation of the Internal Audit function and the Group’s strategic
risk review processes by PricewaterhouseCoopers LLP (PwC).
• Reviewed the processes and controls within the Company’s key corporate functions.
• Received the Group Fraud Risk Assessment for 2015 and ensured that appropriate
measures and controls remained in place and are robust to any changes to the
operating environment.
• Oversaw the change of the Company’s basis of accounting from UKGAAP to FRS101
as reported last year.
• Ensured those systems and processes that impact key data to facilitate timely decision
making were effective.
• Focused on the key processes that support the Group’s execution of its strategy.
Key priorities for 2016 are:
• To monitor the implementation of IT initiatives ensuring appropriate focus on cyber
security in the key areas of customers, suppliers and employees.
• To monitor the implementation of the new Group consolidation and reporting system
to ensure it contributes to the efficiency and effectiveness of the Finance function.
• To oversee the implementation of initiatives highlighted in the PwC report on the
effectiveness of both the Internal Audit function and the Risk Management Framework.
The Committee will continue to focus on ensuring that all the relevant codes and
regulations are complied with to ensure that the business is operating in a controlled
and managed environment.
Maintaining and enhancing the strong governance and risk
management framework together with effective internal controls
are our top priorities.
Rob Rowley
Chairman of the Audit Committee
63
Governance pages 42-91Strategic Report pages 2-41Financial Statements pages 92-146Shareholder Information pages 147-157 Taylor Wimpey plc
Annual Report and Accounts 2015
Audit Committee Report continued
www.taylorwimpey.co.uk
Number of meetings attended
2015 accounts, and report on the progress of the audit to date.
• Reviewed Deloitte’s audit plan for the audit of the Company’s
Audit Committee
Committee members
Rob Rowley
Kate Barker
Mike Hussey
Humphrey Singer(a)
3/3
3/3
3/3
1/1
(a) Appointed to the Board 9 December 2015.
The members of the Audit Committee during 2015 and their attendance
at meetings of the Committee during that year are as set out above.
Details of the Committee’s activities during 2015 and priorities for 2016
are contained in the Letter from the Chairman of the Audit Committee
on the preceding page.
The Audit Committee is chaired by Rob Rowley. All members of the
Committee are Independent Non Executive Directors as required by
the Code. During the year, Humphrey Singer, who was appointed to
the Board on 9 December 2015, joined the Committee on that date and
brings a wealth of financial experience and expertise, which will augment
the Committee’s skill sets. The Board has determined that Rob Rowley
(who currently chairs the audit committee at moneysupermarket.com
Group PLC) and Humphrey Singer both have recent and relevant
financial experience as required by the Code.
Committee meetings are also attended, by invitation, by the
Chairman of the Company and other Non Executive Directors who are
not members of the Committee, the Executive Directors, Head of Internal
Audit, other senior executives and by Deloitte LLP (Deloitte), the external
auditor. The Committee also meets privately with representatives from
Deloitte during at least two Committee meetings per annum, which
normally take place around the time of the full and half year financial
statements, in order to discuss any matters which the auditor may
wish to raise in confidence, without any Executive Directors (other
than the Secretary) being present.
The Audit Committee met on three occasions during the year. At those
meetings, the Committee carried out its remit which primarily includes:
at its February 2015 meeting:
• Reviewed the final draft 2014 Annual Report and Accounts together
with any significant accounting and audit issues thereon; considering
issues of materiality and the external auditor’s report on the progress
of the audit; conducting a formal compliance check.
• Reviewed the draft Preliminary Announcement of the Group’s 2014
results; and advised the Board regarding the appropriateness
of the proposed final maintenance dividend for 2014.
• Conducted the 2014 year end risk review.
• Oversaw the introduction of processes designed to address
the new Viability Statement reporting for 2015.
at its July 2015 meeting:
• Reviewed the final draft half year statement for 2015 together with
details of any significant accounting issues thereon; considering
issues of materiality and the external auditor’s report on its review
of that statement.
• Conducted the 2015 half year risk review.
• Received the Group fraud risk assessment.
• Reviewed an overview of the accounting changes consequent
upon the adoption of the FRS 101 basis of accounting.
• Agreed the brief for the external evaluation of Internal Audit and
of the Company’s approach to strategic risk.
• Advised the Board regarding the appropriateness of the proposed
interim maintenance dividend and special dividend for 2016.
64
at its December 2015 meeting:
• Conducted the 2015 year end risk review.
• Reviewed the outcome of PwC’s independent review of the
effectiveness of Internal Audit and the related review of the
Company’s approach to strategic risks.
• Approved updates to the Audit Committee framework.
• Reviewed and confirmed the processes which allow the Committee
to ensure that the 2015 Annual Report and Accounts meets the
requirements of Code provision C.1.
• Reviewed and confirmed the processes which allow the Committee
to assess the performance of Deloitte during the audit of the
Company’s 2015 full year reporting and make a recommendation
to the Board as to their re-appointment at the 2016 AGM.
• Received a briefing on key accounting judgements with regard
to the Company’s 2015 accounts.
• Oversaw the process leading to the Board’s new Viability Statement,
included for the first time in its 2015 reporting.
In addition, at each meeting, the Committee also reviewed its other
areas of responsibility, including:
• The internal audit process and the review of reports received and
actions arising therefrom.
• The risk management and internal control framework.
• The Company’s whistleblowing procedures and the adequacy
of any investigations.
• Checking for any incidences of fraud, actual, alleged or precautionary,
and ensuring proper controls and a response plan are in place.
• Financial reporting practices.
In carrying out these activities, the Committee places reliance on
regular reports from executive management, Internal Audit and from
the Company’s external auditor. In monitoring the financial reporting
practices, the Audit Committee reviewed accounting policies, areas
of judgement, the going concern assumptions and compliance with
accounting standards and the requirements of the Code. During the
year, the Committee reviewed, prior to publication, other statements
affecting the Group concerning price sensitive information as necessary.
External auditor
Re-appointment
As noted earlier, Deloitte LLP is the Company’s external auditor.
Their performance is kept under regular review by the Board and the
Audit Committee and the Committee undertook a formal assessment
of the external audit process during the external audit of the Company’s
2015 results and Deloitte’s suitability going forward.
This review took the form of a checklist and questionnaire issued
to Directors; executives involved in the detailed stages of the audit
process; and a representative sample of employees in regional business
units which were subject to audit. The responses were augmented by
external feedback on the relative performance of auditors generally, and
from regulatory sources. A summary of the findings was prepared by
Internal Audit and considered by the Audit Committee at its February
2016 meeting.
The outcome of the review was that the Committee recommended to
the Board, which in turn is recommending to shareholders in Resolution
13 on page 153, that Deloitte be re-appointed as the Company’s auditor
at the 2016 AGM.
Tender
A formal competitive audit tender process was carried out by the
Company with regard to the 2008 audit, following which Deloitte was
selected to continue as external auditor to the Company. The current
lead engagement partner is Edward Hanson, whose responsibility for
the audit under Deloitte’s partner rotation scheme commenced with the
2014 audit. The Code requires FTSE 350 companies to put the external
audit contract out to tender at least once every 10 years. The Company
also notes the guidance issued by the FRC by way of transitional
arrangements. Therefore, and having due regard to the foregoing, having
conducted a tender process in 2007/2008, the Company presently
intends to defer tendering again, until completion of Edward Hanson’s
rotation in 2019, but will of course keep the matter under regular review,
taking into account the annual performance review to be conducted by
the Committee as well as other relevant factors. There are no contractual
restrictions on the Company’s selection of its external auditor.
Statement of compliance
The Company has complied throughout the reporting year with the
provisions of The Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender processes and
Audit Committee Responsibilities) Order 2014.
Appointment of the auditor for non-audit services
The Audit Committee has a formal policy on whether the Company’s
external auditor should be employed to provide services other than
audit services. In line with the Code, the Committee has regard to the
relevant ethical guidance regarding the provision of non-audit services
by Deloitte.
This policy requires that there should be a competitive tender process –
except in narrowly defined circumstances where it is considered that,
based on confidentiality, past knowledge and other commercial reasons,
there is an advantage in using a single tender procurement procedure.
The Committee has determined that the following assignments should
not be undertaken by the auditors:
• Bookkeeping or other services related to the accounting records
or financial statements.
• Internal audit outsourcing services.
• The provision of advice on large Information Technology systems.
• Services connected with valuation, litigation support, legal, recruitment
or remuneration.
The Board is satisfied that this policy is conducive to the maintenance
of good governance, best practice and auditor independence
and objectivity.
Non-audit services in 2015 predominantly related to work undertaken
as a result of Deloitte’s role as auditors, in particular the interim review in
connection with the Company’s half year results for 2015 and tax work
which included some advisory services to the Company and its
subsidiaries. Deloitte also performed certain real estate advisory work,
for which they were selected as they were considered to be the best
supplier for that service. All independence considerations were
considered with regard to these services, in line with the above policy,
and were fully compliant with it.
The Audit Committee fully recognises and supports the importance of
the independence of auditors. Its review of the auditor’s performance
during 2015 included non-audit services. The Committee is satisfied that
the carrying out of the above work did not, and will not going forward,
impair the independence of the external auditor. It also recognises that,
from time to time, there is a clear commercial advantage based on cost
and timetable requirements in using the Company’s auditors. As a result,
the value of non-audit services work was £0.2m in 2015 (2014: £0.2m)
as set out in Note 6 to the Accounts on page 110.
The Committee is aware of proposals by the FRC that the current
guidelines on the employment of the external auditor on non-audit work
should be amended, such that the value of non-audit work should be
no more than 70% of the audit fee for the relevant year. As can be noted
from Note 6 to the Accounts, referred to in the preceding paragraph,
if the proposed new guidelines are adopted, the Company would have
been in compliance with them in 2015 and in each of the preceding
two years.
Internal Audit
The Internal Audit function reviews the effectiveness and efficiency
of the systems of internal control in place to safeguard the assets;
to quantify, price, transfer, avoid or mitigate risks; and to monitor
the activities of the Group in accomplishing established objectives.
Following each review an Internal Audit report is provided to both
the management responsible for the area reviewed and the Group
Management Team (GMT). These reports outline Internal Audit’s opinion
of the management control framework in place together with actions
indicating improvements proposed or made as appropriate. The Chief
Executive, the GMT and senior management consider the reports
on a regular basis and are responsible for ensuring that improvements
are made as agreed. A database of audit recommendations and
improvement initiatives is maintained. Follow-up and escalation
processes ensure that such improvements are implemented
and fully embedded in a timely manner.
The Company belongs to and participates in industry-wide
forums and other initiatives aimed at combating fraud within
the construction industry.
Summaries of all key Internal Audit reviews and activity and resulting
reports are provided to the Audit Committee for review and discussion.
The Internal Audit function also formally reviews proposed related party
transactions, such as purchases by employees from Group companies,
to ensure proper procedures are followed and that such procedures
are undertaken strictly in accordance with the formal policy in place
and, where applicable, company law.
During 2015, an independent formal evaluation of the Internal Audit
function was carried out on behalf of the Audit Committee by PwC
and its finding was that Internal Audit continues to operate effectively.
In addition, a number of initiatives were progressed during 2015 to
ensure the Internal Audit function continues to meet both current
best practice and the evolving needs of the Group.
The Internal Audit Charter, which codifies the aims, modus operandi
and outputs of Internal Audit, was reviewed by the Committee for
ongoing appropriateness.
The Head of Internal Audit has direct access at all times to the Chairman
of the Audit Committee, the Chairman of the Board and also to the
Chief Executive and the other Executive Directors.
65
Governance pages 42-91Strategic Report pages 2-41Financial Statements pages 92-146Shareholder Information pages 147-157 Taylor Wimpey plc
Annual Report and Accounts 2015
Audit Committee Report continued
Risk management and internal control
The Group has established an ongoing process of risk management
and internal control, applying Main Principle C.2 and its Supporting
Code Provisions of the Code. The Board is responsible for the
effectiveness of the system of internal control, which has been designed
to meet the requirements of the Group and the risks it encounters,
including taking account of environmental, social and governance
considerations. The systems cannot eliminate the risk of failure but
rather seek to manage both the likelihood of their occurrence and
the extent of their impact, and can only provide reasonable and not
absolute assurance against material misstatement or loss.
The Principal Risks facing the Company, as assessed by the Board,
are set out on pages 36 to 37, together with information on action taken
and/or planned to mitigate each one.
The Board makes its assessment of risk half yearly, after overseeing
a bottom-up and top-down review of risk in all areas of the business.
Action to mitigate the effect of each one is led by the Chief Executive
either directly or indirectly.
The Board’s assessments use a standard methodology which takes
into account environmental, social and governance considerations.
In compliance with the Code, the Board also regularly reviews the
effectiveness of the Group’s system of internal control in providing
a responsible assessment and mitigation of risks. The Board’s
monitoring covers all controls, including financial, operational,
compliance and assurance controls which include risk management.
Compliance with the Group’s system of internal control is primarily
driven and co-ordinated through compliance with an established
Operating Framework (OF) supported by function manuals covering
the main disciplines. These include clear levels of delegated authority,
responsibility and accountability, and are subject to periodic review
to ensure they remain appropriate and proportionate to the Group’s
changing strategic and operating requirements. Adherence to the OF
is monitored by management and assessed independently by Internal
Audit. At its half year and year end meetings, the Board reviews risk
in relation to the Company’s strategic objectives and its current plans
to deliver them. It also reviews progress and performance in action
taken to mitigate the impact of those risks.
The Board is supported in this by more regular and detailed reviews,
by the Audit Committee, including the review of progress reports from
Internal Audit, and by operational risk reviews across the business,
led by the GMT. These reviews during 2015 resulted in a number
of enhancements to internal controls, designed to reduce or better
manage risk across the business. These included continuing reviews
of the effectiveness of the embedding, during 2014, of the COINs
and 1B1S ERP business systems, which have improved the accuracy,
timeliness and uniformity of data used to manage, and report on,
the Group’s businesses, and further work towards updating the OF
and Commercial and Finance Manuals, which guide the businesses
in ensuring compliance with Group standards.
During 2015, the Committee oversaw the introduction of new and
revised processes and reporting, designed to meet the requirements
of the FRC’s September 2014 Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting. This aims to
bring together elements of best practice for risk management; to prompt
boards to consider how to discharge their responsibilities in relation to
Principal Risks faced by the Company; embed risk management and
internal control in the Company’s business processes; and highlights
related reporting responsibilities. These new regulations applied for
the first time to the Company’s 2015 reporting, and the Committee
believes they will enhance sound stewardship by the Board in these
areas. The principal change is the inclusion of the new Viability
Statement, referred to later in this Report.
66
At its meeting in February 2016, the Board, after conducting its own
review and after reviewing more detailed assessments from the
Audit Committee, remained satisfied that the system of internal control
continued to be effective in identifying, assessing, and ranking the various
risks facing the Company; and in monitoring and reporting progress
in mitigating their potential impact on the Company. The Board also
approved the statement of the Principal Risks set out on pages 36
to 37 of this Annual Report.
Whistleblowing
The Group’s whistleblowing policy is supported by a clear
process that includes an externally facilitated hotline through which
any person, including employees of the Company, may, in confidence,
raise concerns about possible improprieties in financial reporting, other
operational matters or inappropriate behaviours in the work place.
All whistleblowing cases are formally investigated by the Head of
Internal Audit, Group Director of Health, Safety and Environment
(where appropriate), Group Human Resources Director and/or the
Group Legal Director and Company Secretary depending on the
nature of the issue. The Chief Executive is apprised of all allegations
and conclusions of the review.
Whistleblowing incidents and their outcome are reported to the
Audit Committee. Whistleblowing is a standing item on each Audit
Committee agenda, which allows the Committee to regularly review
the adequacy of the policy in line with its requirement to do so under
the Code. The process is regularly reviewed and during 2015 an
independent, external appraisal was conducted, which confirmed
that the Company’s policy in this respect was adequate. A number
of administrative recommendations were however made and these
have been addressed. The Committee is satisfied that the policy
and its administration remain effective.
Change of basis of accounting
As reported last year, the Company changed its basis of accounting
with effect from 1 January 2015, from UKGAAP (which the Financial
Reporting Committee (FRC) announced should change for all relevant
companies from that date) to FRS 101. The reason for choosing FRS
101 is that it is based on International Financial Reporting Standards
(IFRS), as endorsed by the European Union, and currently used for
the Group financial statements. It was therefore proposed that the
Company’s basis of accounting be changed from UKGAAP to
FRS 101 with effect from 1 January 2015.
The Audit Committee continues to support this change, which is
largely a technical matter designed to ensure that the Company’s
accounts continue to be prepared in an appropriate way, which meets
the standards applied by the accounting and auditing bodies of the UK,
and remains in line with current law, regulation and guidance. During
the year, the Committee oversaw the change and ensured that it had
no detrimental effect on the Company’s reporting for 2015.
The Group Accounts are not impacted by this change. The Group
Statutory Accounts are, and will continue to be prepared in accordance
with IFRS as adopted by the European Union.
Going concern
The Group has prepared forecasts, including certain sensitivities, taking
into account the Principal Risks identified on pages 36 to 37. Having
considered these forecasts, the Directors remain of the view that the
Group’s financing arrangements and capital structure provide both
the necessary facilities and covenant headroom to enable the Group
to conduct its business for at least the next 12 months. Accordingly,
the consolidated financial statements have been prepared on a going
concern basis.
www.taylorwimpey.co.uk
Significant items
As part of the above process, the Committee considered the following
significant items in connection with the preparation of the 2015 Annual
Report and Accounts:
• That the carrying value of inventory is reflective of the lower of cost
and net realisable value and all relevant disclosures are included in the
accounts. The Company carries out a net realisable value assessment
for inventory every six months, the process and results of which are
discussed by the Audit Committee.
• That the assumptions used in calculating the net pension liabilities
are reasonable and supported by appropriate data and external
advice. The Company takes external advice, including market-wide
comparisons, in valuing pension assets and liabilities. These are
discussed and agreed by the Committee.
• The Committee also satisfied itself that the underlying business
processes that dictate the points of recognition for revenue, and the
way in which inventory is costed and allocated, remain appropriate.
As part of the year-end process the Audit Committee received
updates on other judgemental areas including provisions and taxation.
The presentation of exceptional items and changes to IFRS were also
considered when reviewing the 2015 Annual Report and Accounts.
Conclusion
A summary of the process and of the Committee’s findings, was
considered by the Board at its meeting on 25 February 2016. The
outcome of that review was that the Committee confirmed to the Board
that the 2015 Annual Report and Accounts met the requirements of
Code provision C.1, and the Board’s formal statement to that effect,
to meet the requirements of the Code, is set out on page 50.
Viability Statement
A new requirement for the Company’s 2015 reporting, arising from
the FRC’s September 2014 Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting, is the inclusion
of a Viability Statement. This is designed to be a longer term view
of the sustainability of the Company’s strategy and business model
and related resourcing, in the light of projected wider economic and
market developments.
During 2015, the Committee oversaw the introduction of processes
designed to enable the Board to make this statement. The statement
appears on page 35 together with details of the processes, assumptions,
and testing which underpin it.
Annual Report and Accounts 2015
Code provision C.1
The Board has responsibility under C.1 of the Code and its Supporting
Principles and Code Provisions, for preparing the Company’s Annual
Report and Accounts; for ensuring that it presents a fair, balanced and
understandable assessment of the Company’s position and prospects;
and that it provides the information necessary for shareholders to assess
the Company’s performance, business model and strategy.
Process
The review of the Company’s Annual Report and Accounts took the form
of a detailed assessment of the collaborative process of drafting them,
which involves the Company’s Investor Relations; Finance; Company
Secretariat; and Internal Audit Departments, with guidance and input
from external advisers. It ensured that there is a clear and unified link
between this Annual Report and Accounts and the Company’s other
external reporting, and between the three main sections of the Annual
Report and Accounts – the Strategic Report; the Governance Reports;
and the Accounts.
In particular, the Committee:
• Reviewed all material matters, as reported elsewhere in this
Annual Report.
• Ensured that it correctly reflected the Company’s performance
in the reporting year, as described on pages 12 to 41.
• Ensured that it correctly reflected the Company’s business model,
as described on pages 18 to 33.
• Ensured that it correctly described the Company’s strategy,
as described on pages 16 to 17.
• Ensured that it presented a consistent message throughout.
• Considered whether it presented the information in a clear and concise
manner, illustrated by appropriate KPIs, to facilitate shareholders’
access to relevant information.
67
Governance pages 42-91Strategic Report pages 2-41Financial Statements pages 92-146Shareholder Information pages 147-157 Taylor Wimpey plc
Annual Report and Accounts 2015
Remuneration Report
Main objective
• To establish and maintain formal
and transparent procedures for
developing policy on executive
remuneration and for agreeing the
remuneration packages of individual
Directors and senior executives
and to monitor and report on them
2015 Developments
• Carefully monitored Company
performance in relation to the
achievement of its strategic goals,
so as to ensure that the potential
and actual reward available to
Executive Directors and the wider
executive team was closely linked
to performance measures reflecting
those achievements
• Further aligned employees’ and
shareholders’ interests by extending
the participation in the PSP to members
of the Company’s regional Business
Unit management teams and by
further extending shareholding target
guidelines below Board level
• In conjunction with the Board,
further increased participation
in the all-employee share plans
and the percentage of employee
shareholders
2016 Objectives
• To review the Remuneration Policy
and consult as appropriate ahead
of the submission of the Policy
to shareholders for approval at
the 2017 Annual General Meeting
• To continue the process of increased
alignment with shareholders through
increased participation in our all-employee
share plans and enhanced share
ownership guidelines
I am delighted to be able to again take this opportunity to summarise the Company’s
Remuneration Policy and the way it has been implemented during 2015.
As always, the Committee remains very mindful of the interest in executive remuneration and
has again sought to ensure that the remuneration policies and practices at Taylor Wimpey drive
behaviour that is appropriate and in the long term interests of the Company and its shareholders.
Shareholders approved the Remuneration Policy (the Policy), as set out on pages 71 to 73
of this Report, at the 2014 AGM. The Remuneration Committee is of the view that the Policy
continues to remain appropriate and should therefore continue to operate until its planned renewal
at the Company’s 2017 AGM. There are no changes proposed to the Policy; however, there are
some minor differences in the way in which the Policy will be implemented in 2016 compared
with 2015. In order to assist shareholders, we have added additional explanations where there
are any differences in the way in which the Policy will be implemented in 2016 compared with
previous years. Where additional information has been included in this Policy, this has again
been clearly indicated in italicised text.
Although no changes are proposed, the Policy has, nevertheless, again been included in this
Report in full, for ease of reference, so as to assist shareholders in reviewing the Company’s
implementation of the Policy during 2015 and the Committee’s proposals for 2016. The Annual
Report on Remuneration, which describes the implementation of the Policy during the year,
will again be subject to an advisory vote by shareholders, and this will take place at the
forthcoming AGM to be held on 28 April 2016.
The Committee has continued its much valued practice of engaging with key institutional investors
and shareholder representative bodies with regard to Director remuneration. As in previous years,
the Committee has considered and taken into account all of the feedback which it has received
and is, as ever, very grateful for the constructive engagement and feedback. In addition,
the Committee has carefully reviewed and taken into consideration applicable developments
in corporate governance and best practice during the year.
With regard to salaries, it is proposed that the general increase throughout the Company to take
effect from 1 April 2016 will be 3% and it is proposed that this level of increase will also apply
to the three Executive Directors.
With regard to the 2015 short term incentive (cash bonus) in place for Executive Directors,
the Company performed strongly against certain of the Group KPIs during the year, particularly
in respect of its financial targets: Earnings Before Interest and Tax (EBIT), Margin and Cash
Conversion. The Company did not however meet the challenging Customer Service target that
was set for 2015 and which attracted a 20% weighting. Accordingly, the bonus outturn for 2015
was 78% of the maximum bonus potential. One-third of this incentive for the Executive Directors
will be deferred into shares to be held on trust for three years. For 2016, the improvement of
Customer Service remains a very high priority for the Company and therefore the Committee has
retained this as a target with an unchanged weighting of 20% of the overall short term incentive
scheme targets.
Turning to the Performance Share Plan (PSP), as previously explained, the ROCE and Margin
performance conditions of the 2012 awards were measured at different times compared to the
relative TSR performance conditions for that award, with the consequence that only the ROCE
and Margin elements could be included in the single figure for 2014 reported last year.
The Committee believes in ensuring a strong alignment between
Executive Directors and senior management with the interests of
the Company’s shareholders.
Baroness Ford of Cunninghame
Chairman of the Remuneration Committee
www.taylorwimpey.co.uk
Accordingly, we were able to report last year that the ROCE and Margin
elements of the 2012 award would each vest at 100% and I can now
confirm that 100% of the relative TSR vs FTSE 250 element of the award
vested and that 71.86% of the relative TSR vs Sector Peers element
vested. As a result, as set out in the table on page 80, 94.37% of the
overall 2012 PSP award vested in March 2015.
As set out in previous Remuneration Reports, the performance period
for PSP awards for 2013 and for subsequent awards was amended
such that all performance conditions, including those for TSR, are now
measured over a period of three financial years, with all ending and
measured as at 31 December of the final year. As a result of this, I can
now confirm that, based on the Company’s results for 2015 and its
relative TSR for the three year period ending on 31 December 2015,
all measures were met in full which has resulted in an overall vesting of
100%, details of which are also set out in the table on page 80. The single
figure for 2015 set out below therefore includes the TSR elements of the
2012 PSP awards (which, for example, amounted to £1,488,085 for
Pete Redfern) plus all elements of the 2013 awards.
The level of vesting under the PSP awards made in 2012 and 2013
reflect the continuing improvement in the Group’s performance including
Return on Capital Employed and Operating Margin from 14.3% to
27.1% and 11.2% to 20.3%, respectively, between 2012 and 2015.
This improvement in financial performance has contributed to a c.209%
increase in Taylor Wimpey’s share price over the same period (from
65.8p on 31 December 2012 to 203.1p on 31 December 2015) and
total shareholder return of c.243% over the same period, resulting
in a significant increase in value for our shareholders and in the level
of the awards that have vested.
The Committee believes that the level of achievement under both
the short term and long term plans reflects the Company’s excellent
underlying performance, which is described in the Chairman’s Statement
on page 10 and the Chief Executive’s Review on page 12.
Executive Directors’ single figure
The following chart compares the 2015 single figure for total
remuneration for each of the Executive Directors with the figure for 2014.
In each case the figures have been restated (as explained in note (c) on
page 78) to show a more meaningful comparison by including all of the
2013 PSP awards that vested in the 2015 figures and all of the 2012
PSP awards that vested in the 2014 figures.
Executive Director
Single total remuneration figure (£’000)
Pete Redfern
Chief Executive
Ryan Mangold
Group Finance Director
James Jordan
Group Legal Director
and Company Secretary
2015
19% 17%
2014
16% 17%
2015
20% 19%
2014
17%
19%
2015
19% 17%
2014
17% 17%
64%
£5,531
67%
£6,126
61%
£2,496
64%
£2,590
64%
£2,592
66%
£2,868
Fixed Pay
Bonus
LTIP
The operation of the incentive arrangements for 2016 will be
unchanged structurally. The short term incentive will therefore retain
EBIT, Cash Conversion and Customer Service as measures but we
have decided to increase the weighting on EBIT from 35% to 40%.
The Committee has also decided to replace the Margin performance
measure with a Return on Net Assets measure in order to recognise
the importance to the Company of capital efficiency. Margin will of
course remain an area of particular operational focus for the Group
and will be taken into consideration as part of the Committee’s
assessment of the financial underpin test that is applied before
any award vests under the PSP. With regard to the PSP itself, the
performance measures will be revised to: TSR versus the FTSE 100;
TSR versus a peer group to which has been added Countryside
Properties; plus the ROCE and Cash Conversion measures.
The ROCE measure has been stretched from a range of 16% to 24%,
to 18% to 26% in order to reflect the continued progress made
in improving the strength and quality of the landbank, whilst at the
same time increasing our expected returns from the business.
The Committee believes in ensuring a strong alignment between
Executive Directors and senior management with the interests of the
Company’s shareholders. Executive Directors’ interests continue to
be strongly aligned with those of the Company’s shareholders through
the shareholding requirements described on page 84, and also via
the requirement to defer each year one third of their cash bonus into
shares which are then required to be held on trust for three years –
this is described in more detail on page 80. This alignment was further
enhanced with regard to shares that vest under the PSP, through the
introduction of a requirement to retain such shares for at least one year
after vesting of the 2014 awards and for two years after any vesting
of the 2015 and subsequent years’ awards (other than to pay tax
on exercise).
The Committee believes that the remuneration of executives and
the whole team during 2015 and the incentives for further improving
performance that have been awarded during the year, support the
Company’s strategy to deliver enhanced returns to shareholders.
The Committee also believes that the short term incentive payments
and the level of vesting of awards under the PSP reflect the Company’s
success to date in the delivery of that strategy.
I do very much hope that you will again feel able to support the level
of remuneration paid with respect to 2015, and our remuneration
proposals for 2016, at this year’s Annual General Meeting.
Baroness Ford of Cunninghame
Chairman of the Remuneration Committee
68
69
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Remuneration Report continued
Remuneration Committee
Committee members
Baroness Ford
of Cunninghame,
Committee Chairman
Kate Barker
Kevin Beeston, Chairman
Rob Rowley
Number of meetings attended in 2015
2/2
2/2
2/2
2/2
Introduction
This Report has been prepared to comply with the provisions of the
Companies Act 2006 and other applicable legislation, including the
Large and Medium-Sized Companies and Groups (Accounts and
Reports) Regulations 2008 (as amended) (Regulations), and has
also been prepared in line with the recommendations of the UK
Corporate Governance Code (the ‘Code’) and the UKLA Listing Rules.
This Report has been prepared by the Remuneration Committee
on behalf of the Board.
The 2015 Remuneration Report includes disclosures which reflect
in full the BIS Regulations on remuneration reporting, divided into
two sections:
• Remuneration Policy Report, setting out the framework within
which the Company remunerates its Executive Directors and
other senior executives. This was approved by shareholders at
the 2014 AGM and is binding on the Company from the 2014
AGM. It is intended to submit a new Remuneration Policy report
to shareholders for approval at the 2017 AGM.
• Annual Report on Remuneration, setting out how the Company’s
present Remuneration Policy was applied during 2015 and how
the policy will be implemented in 2016. The Annual Report on
Remuneration will be subject to an advisory resolution at the
AGM on 28 April 2016. Details of the resolution and its status
as an advisory vote are set out in the Notes to the Notice of
Meeting on page 154.
The Regulations require that the Company’s auditors report
to shareholders on certain parts of this Report and state whether
in their opinion those parts of it have been properly prepared in
accordance with the Regulations. The Remuneration Policy Report,
which describes the Committee’s Remuneration Policy for Executive
Directors and has applied since its approval by shareholders on
17 April 2014, contains unaudited information. Elements of the Annual
Report on Remuneration, which describes how the Committee has
implemented its existing policy in 2015, contain audited information.
Remuneration Policy Report
Unaudited information
This part of the Report has been prepared in accordance with Part 4
of Schedule 8 set out in the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008 (as amended).
The Company’s Remuneration Policy was put to a shareholder vote
at the 2014 Annual General Meeting of the Company (AGM) and
was approved by 98% of shareholders who voted.
There is no requirement to vote on the Policy in 2016 as no changes
to the Policy are proposed. The Policy is set out below for information
only; the chart, showing remuneration scenarios on page 73, has
been updated to reflect proposed 2016 remuneration levels and minor
changes to the text of the Policy have been made to reflect the fact
that it has been previously approved by shareholders. In order to assist
shareholders, we have also added additional explanations where there
are any differences in the way in which the policy will be implemented
in 2016 compared with the way in which the policy was implemented
when first approved by shareholders. Where additional information has
been included this has been clearly indicated in italicised text.
The Remuneration Policy Report as approved by shareholders at the
Company’s 2014 AGM is set out on pages 61 to 66 of the Company’s
2013 Annual Report and Accounts and also appears on the Company’s
web site at www.taylorwimpey.co.uk/corporate/investor-relations/
corporate-governance
Policy overview
A key part of the Committee’s role is to ensure that the remuneration
of Executive Directors and senior management is aligned to the
Company’s strategic objectives. It is, of course, key that the Company
is able to attract and retain leaders who are focused and also
appropriately incentivised to deliver the Company’s strategic objectives
within a framework which is aligned with the interests of the Company’s
shareholders. This alignment is achieved through a combination
of deferral into shares of a percentage of the short term incentive
arrangements and also via share ownership guidelines which require
executives to build up holdings of Taylor Wimpey shares by retaining
vested share awards. These guidelines require Executive Directors to
put in place a plan to accumulate a holding in the Company of twice
their basic salary within a specified period.
The Committee’s Remuneration Policy ensures that a significant
percentage of the overall package of Executive Directors and senior
management remains at risk. With all packages substantially geared
towards share incentive schemes and performance, the Committee
believes that the pay and benefits of its Executive Directors and senior
management adequately take account of reward versus risk.
In line with The Investment Association’s Guidelines on Responsible
Investment Disclosure, the Remuneration Committee ensures that the
incentive structure for Executive Directors and senior management
will not raise environmental, social or governance (ESG) risks by
inadvertently motivating irresponsible behaviour. More generally,
the Committee under its terms of reference may, where it considers
appropriate, take ESG matters into account when considering the
overall remuneration structure.
The Committee considers that no element of the remuneration
arrangements, which are all very carefully considered, will encourage
inappropriate risk taking or behaviour by any executive. The table on
pages 71 to 73 summarises the Committee’s Policy for the Remuneration
of Executive Directors which, since being approved by shareholders at
the 2014 AGM, became effective from the conclusion of the 2014 AGM
and remains binding until the AGM in 2017. It also summarises the
remuneration position of the Chairman and Non Executive Directors
and the Company’s all-employee share schemes.
www.taylorwimpey.co.uk
Performance targets
Company and individual
performance are factors
considered when
reviewing salaries
Element
Salary
Purpose and
link to strategy
To recruit and reward
executives of a suitable
calibre for the role and
duties required.
Operation
Maximum
Salaries are normally reviewed annually to ensure
that salaries remain competitive with external
market practices and are competitive when
measured against FTSE peers (other non-financial
companies of a similar size in terms of market
capitalisation and other large UK housebuilders).
There is no automatic entitlement to an increase
each year.
Takes into account the following:
• the performance, role and responsibility of each
individual Director;
• the economic climate, general market conditions
and the performance of the Company;
• the level of pay awards across the rest
of the business; and
• salary levels in comparably-sized companies
and other major housebuilders.
The maximum annual salary increase
will not normally exceed the average
increase which applies across the
wider workforce. However, larger
increases may be awarded in
certain circumstances including
but not limited to:
• increase in scope or
responsibilities of the role;
• to apply salary progression for
a newly appointed Director; and
• where the Director’s salary
has fallen significantly below
the market positioning.
Chairman
and Non
Executive
Director fees
The Chairman’s and
Non Executive Director
fees should be in line with
recognised best practice
and be sufficient to attract
and retain high calibre
non executives.
Fees consist of a single consolidated fee for
the Chairman plus the payment of a cash amount
to cover his office expenses1, an annual fee for
the other Non Executives and additional fees
for the Chairman of the Audit Committee and
the Remuneration Committee. An additional fee
is also paid to the Senior Independent Director
in recognition of the responsibilities of that role.
Aggregate annual limit of
£1 million imposed by the
Articles of Association.
N/A
Set by reference to the responsibilities
undertaken by the non executive, taking into
account that each Non Executive Director is
expected to be a member of the Nomination
Committee and/or the Audit Committee and/or
Remuneration Committee.
Reviewed periodically but generally annually
and at least every other year. Takes into account
levels in comparably-sized companies and
other major housebuilders.
Fees are paid monthly in cash.
Non Executive Directors do not participate
in any incentive, share scheme, benefits-in-kind
or pension arrangements. The Chairman is
entitled to participate in the Company’s
private medical insurance scheme.
The main benefits offered include:
• company-provided car or a cash allowance
in lieu;
• provision of a fuel card;
• life assurance;
• private medical insurance; and
• a 5% discount on the price of a new or part
exchange home acquired from the Group
in the UK or Spain.
Benefits-in-kind are not pensionable.
Other
benefits,
including
benefits-
in-kind
Provides a competitive
package of benefits to
assist with recruitment
and retention of staff.
N/A
Life assurance of up to four times
basic salary and a pension of up
to two-thirds of the member’s
entitlement for a spouse on death
in service, or in retirement, are
provided, together with a children’s
allowance of up to 100% of the
dependant’s pension for three or
more eligible children. The cost of
these benefits is not predetermined.
The value of a company-provided
car or a cash allowance in lieu is of
a level appropriate to the individual’s
role and is subject to review from
time to time. The fuel card covers
the cost of all fuel, for both business
and personal use.
For home purchases, the price
discount is calculated at the plot
release price less the average
discount to third party buyers for
that house type, less a further 5%.
70
71
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Remuneration Report continued
www.taylorwimpey.co.uk
Operation
Maximum
Performance targets
Element
Purpose and
link to strategy
Short term
incentive
arrangement
(STIA)
Rewards the achievement
of stretching objectives that
support the Company’s
annual and strategic goals.
Compulsory deferral in
shares (with no matching)
is designed to further align
the interests of Directors
with shareholders.
Long term
incentive
plan (LTIP)
Annual grants of share-
based long term incentives
assist with retention and
help to incentivise senior
executives to achieve
returns for shareholders
through the inclusion of
relative Total Shareholder
Return (TSR) as a measure,
driving further UK operating
margin progression and
improving return on net
operating assets through
the cycle. The use of
shares and the introduction
in 2014 of a post-vesting
shareholding period,
helps align the interests
of senior executives with
those of the Company’s
shareholders.
Bonus awards are determined by the Committee
after the year end, based on annual performance
against targets set at the beginning of each year.
One-third of any bonus payable is deferred into
shares for three years. No further performance
conditions apply.
Dividends or other distributions will accrue in
favour of participants during the three year deferral
period and will be received with any shares that
vest after the applicable deferral period.
A clawback mechanism applies to all participants
in the event of a material misstatement of the
Group’s accounts and also for other defined
reasons. The period of the clawback is three
years from the date of payment.
No element of any STIA is pensionable.
Executive Directors and other designated
senior executives can receive annual awards of
performance shares or share options2, although
it is the Company’s normal policy to grant
performance shares only.
Awards of performance shares provide alignment
with shareholders as they deliver (subject to
meeting performance conditions) the full value
of the shares, which can increase and decrease
over the three year performance period.
Dividends or other distributions will accrue
for Directors during the performance period
and will be received with any shares that vest
in favour of participants after the applicable
performance period.
For awards made in 2014 there was a
requirement to hold net after tax shares
resulting from any vesting for at least one
year post-vesting, rising to two years for
awards made in 2015 and beyond.
Performance measures are currently
measured over three financial years.
Pension
The Company aims
to provide competitive
retirement benefits that
represent an appropriate
level of cost and risk for
the Group’s shareholders3.
Pension benefits for Executive Directors are
provided through one or more of the following
arrangements:
• Personal Choice Plan4;
• Taylor Wimpey Pension Scheme5;
• or as cash allowances.
72
The STIA measures are based
on a scorecard of key annual
financial, operational and
environmental measures
and the measures for 2016
are described in the Annual
Report on Remuneration.
The Committee may vary
the metrics and weightings
from year to year according
to strategy and the market,
however financial measures
will normally have the most
significant weighting.
Measures for 2015 are based
on: ROCE (RONA); Relative
TSR measured against a FTSE
grouping of the 51st to 150th
ranking companies; TSR
measured against an
unweighted industry peer
group; and Cash Conversion.
Vesting of awards is also
subject to the achievement
of a financial underpin.
The Committee may vary the
measures that are included
in the plan and the weightings
between the measures from
year to year. Any changes to
the metrics would be subject
to prior consultation with the
Company’s major shareholders.
The targets and weightings for
2016 are described in the Annual
Report on Remuneration.
N/A
The maximum STIA opportunity
for Executive Directors is set at
150% of base salary. Target is
set at 75% of salary and
threshold at 0%.
The maximum award (currently
in performance shares) is normally
over shares with a face value of
200% of base salary. In exceptional
circumstances this can be increased
up to 300%.
If share options were to be
granted in addition to or instead
of performance shares then the
limits would be doubled to reflect
the relative fair value of options
to performance shares.
Pete Redfern: cash allowances
of 20% of salary up to a scheme
specific cap and 25% of salary
above the cap.
James Jordan: cash allowances
of 20% of salary up to a scheme
specific cap and 28% of salary
above the cap.
Ryan Mangold: 20% of salary, split
between a cash allowance and
Company pension contribution7.
Company contributions to any
pension scheme in respect of the
recruitment of a new Executive
Director will not exceed 30%
of base salary per annum.
A Salary Exchange Arrangement
is available, allowing the sacrifice
of a portion of salary, to be paid
into a pension scheme as a
Company contribution.
Element
All-employee
share
schemes
Purpose and
link to strategy
All employees including
Executive Directors are
encouraged to become
shareholders through the
operation of all-employee
share plans such as
the HMRC approved
Sharesave plan and a
Share Incentive Plan (SIP).
Operation
Maximum
Performance targets
The Sharesave plan and SIP have standard
terms under which all UK employees with
at least three months’ service can participate.
N/A
Sharesave: Employees can elect
for a savings contract of either
three or five years, with a maximum
monthly saving set by legislation
or by HMRC. Options can be
exercised during the six months
following the end of the contract.
SIP: Employees can elect to contribute
an amount per month or per tax year
by one or more lump sums.
The maximum saving or
contribution level is set by legislation
or Government from time to time
and the Committee reserves the
right to increase contribution
levels to reflect any approved
Government legislative changes.
Shareholding
guidelines
Encourages greater levels
of shareholding and aligns
employees’ interests with
those of shareholders.
Executive Directors and senior executives are
expected to achieve and maintain a holding
of the Company’s shares at least equal to a
significant proportion of their respective salary.
Executive Directors: 200% of
salary (100% within five years
of appointment and balance by
agreement with the Chairman)6.
N/A
1. The Company makes a contribution to the Chairman’s office-related and other expenses, as reported on page 79.
2. Taylor Wimpey Share Option Plan – Awards made under this plan may include Income Tax-approved awards made up to HMRC’s aggregate limit of £30,000. Awards normally vest
after three years from the start of the performance measurement period provided that the performance condition has then been achieved. No awards have been made under this
plan since 2009 and no further awards are intended.
3. Taylor Wimpey Pension Schemes – The Group has two principal UK pension schemes: Taylor Wimpey Personal Choice Plan and Taylor Wimpey Pension Scheme (TWPS). The latter
was created on 7 March 2013 and all members of the George Wimpey Staff Pension Scheme and the Taylor Woodrow Group Pension & Life Assurance Fund, the two legacy
defined benefit schemes, were transferred into the TWPS on 1 October 2013. Two Directors are members of the TWPS, which is closed to future accrual.
4. Taylor Wimpey Personal Choice Plan (PCP) – The PCP was introduced on 1 April 2002. It is a defined contribution stakeholder pension scheme, which all new eligible UK employees
are invited to join. All active members of the two legacy defined benefit arrangements were invited to join the PCP when those arrangements closed to future accrual.
5. TWPS – Pete Redfern and James Jordan are members of the Executive section of the TWPS. They have a Normal Retirement Age under the TWPS of 62.
6. Until the 200% target is achieved, an Executive Director will be required to retain in shares at least 50% of the net of taxes gain arising from any shares vesting or acquired pursuant
to the LTIP.
7. This percentage has been corrected from previous disclosures made with regard to Ryan Mangold’s pension allowance which was previously disclosed in this section at a level of 15.6%
(although the full contribution of 20% was disclosed correctly in other sections of the Remuneration Report for 2014).
Performance criteria pay chart 2016
The chart below illustrates the level and mix of remuneration based on the current policy depending on the achievement of threshold, target and
maximum for the Executive Directors. It has been updated to reflect 2016 salary levels but the assumptions used are the same as in the Policy
Report that was approved by shareholders at the 2014 AGM.
(£000’s)
4,000
3,200
2,400
1,600
800
0
£3,933
42%
£2,007
31%
16%
31%
£1,064
100%
53%
27%
£1,957
42%
32%
26%
£989
17%
31%
52%
£515
100%
£1,850
41%
31%
28%
£956
16%
30%
54%
£518
100%
Below Target Target Maximum
Below Target Target Maximum
Below Target Target Maximum
Pete Redfern
Chief Executive
Ryan Mangold
Group Finance Director
Fixed Pay
Bonus
LTIP
James Jordan
Group Legal Director
and Company Secretary
1. Salary is £819,724, £412,000 and £380,586 for Pete Redfern, Ryan Mangold and James Jordan, respectively with effect from 1 April 2016.
2. Benefits are £47,000, £21,000 and £43,000 for Pete Redfern, Ryan Mangold and James Jordan, respectively.
3. Pension is £195,924, £81,800 and £93,764 for Pete Redfern, Ryan Mangold and James Jordan, respectively.
4. For the Short Term Incentive Arrangement the target and maximum award is 75% and 150% of salary, respectively.
5. For performance share awards under the long term incentive plan (PSP) the target (assumed for these purposes to be at threshold performance) and maximum are 40% and 200%
of salary, respectively.
73
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Remuneration Report continued
Additional information – Malus and clawback
During 2014, the Committee reviewed and updated the malus and
clawback provisions to ensure compliance with the 2014 Code and took
the opportunity to extend these provisions so that they applied to future
STIA awards and Long Term Incentive Plan (PSP) awards made in 2015
and future years. Where there has been a misstatement of results; error
in calculating the incentive payment; or misconduct on the part of the
individual, the Committee has the ability to seek to recover any overpaid
bonus or PSP award. This applies for a period of up to three years
following the determination of the performance conditions applying
to the award and can be effected by reducing (if necessary to zero)
the payment or vesting of any future STIA or PSP award or by requiring
the individual to repay the overpaid amount.
Committee discretion
The Committee fully recognises that the exercise of discretion must
be undertaken in a very careful and considered way and that it is an
area that will quite rightly come under scrutiny from shareholders and
other stakeholders. It is however important for the Committee to retain
some discretion to make payments outside of its Remuneration Policy
in exceptional circumstances. The Committee confirms that any exercise
of discretion in such circumstances would be within the available
discretions set out in this Report and the maximum levels available
set out in any plans would not be exceeded.
With regard to the STIA and LTIP, the Committee, consistent with
market practice, retains discretion over a number of areas relating to
the operation and administration of these plans but in all cases within the
rules. These include (but are not limited to) the following (albeit with the
level of award restricted as set out in the policy table on pages 71 to 73):
• Who participates in the plans.
• The timing of grant of award and/or payment.
• The size of an award and/or a payment, subject to the limits of
the rules.
• Discretion relating to the measurement of performance in the event
of a change of control or reconstruction.
• Determination of a good leaver (in addition to any specified categories)
for incentive plan purposes based on the rules of each plan and
the appropriate treatment chosen.
• Discretion to dis-apply time pro-rating in the event of a change
of control or good leaver circumstances.
• Adjustments required in certain circumstances (e.g. rights issues,
corporate restructuring, acquisition, divestment, change of control,
special dividend or a change in prevailing market conditions).
• The ability to adjust existing performance conditions for exceptional
events so that they can still fulfil their original purpose.
How shareholder views are taken into account
The Remuneration Committee considers very seriously all shareholder
feedback received in relation to remuneration each year and guidance
from shareholder representative bodies more generally. Shareholder
views are key inputs when shaping the Remuneration Policy and the
Committee welcomes any comment or feedback on any aspects of
remuneration and will always consider and respond.
The Committee regularly engages with its largest shareholders
regarding the ongoing Remuneration Policy and implementation and
will take into account any feedback when determining any changes
that might apply. The last such consultation took place in December
2015 and included the proposed performance targets and weightings
of the PSP and STIA and salary proposals for 2016.
The Committee follows the principles of good governance relating
to Directors’ remuneration as set out in the Main Principles, Supporting
Principles and Code Provisions of the Code. The Committee reviews
74
and takes into account any governance related developments and
guidance that arise, on an ongoing basis.
How performance measures were chosen
The performance metrics that are used for each of the short and
long term incentive plans have been selected to reflect the Group’s
key strategic goals and are designed to align the Directors’ interests
with those of the Company’s shareholders.
The STIA performance metrics include a mix of financial and personal
metrics reflecting the key annual priorities of the Group. The financial
metrics will generally determine at least 50% of the bonus and include
profit before interest and tax as this reflects the Company’s strategic
objective to increase profit. The other metrics, selected on an annual
basis, will be measurable and will ensure that executives are motivated
to deliver across a scorecard of key objectives.
The performance conditions applicable to the LTIPs were selected by
the Remuneration Committee as they are consistent with the overall
longer term success of the Company. TSR provides an external
assessment of the Company’s performance against its competitors
via an unweighted industry peer group and relative TSR measured
against the FTSE 250. It also aligns the rewards received by executives
with the returns received by shareholders. The Margin, ROCE and Cash
Conversion targets ensure that returns to shareholders and the
generation of cash to fund them are the result of long term sustainable
financial performance.
The Committee will review the choice of performance measures and
the appropriateness of the performance targets each year. Targets are
set based on a sliding scale that takes account of internal planning and
external market expectations for the Company. Only modest rewards
are available for delivering threshold performance levels with maximum
rewards requiring substantial out-performance of our challenging plans
approved at the start of each year.
Additional information – Performance metrics
As referred to in last year’s letter from the Chairman of the Remuneration
Committee, the Margin metric used in the PSP in recent years has been
replaced by a Cash Conversion metric which will apply to 25% of the
2015 awards. A greater focus on Cash Conversion is a key element of
the strategy that has been outlined to shareholders during 2014. For
2016, Margin will also be replaced by Return on Net Assets (RONA)
as a bonus metric. RONA is intended to reinforce the focus on capital
efficiency and phasing of capital needs in the short term. However,
Margin remains an important KPI for the Company and Margin
performance will be taken into consideration as part of the Committee’s
assessment of the financial underpin that applies to awards under the
PSP. In light of the growth in the Group’s market capitalisation, the FTSE
250 peer group used for one of the TSR components of the PSP awards
in previous years has been replaced, beginning with the 2015 awards,
by a peer group comprised of the 50 companies ranked above and 50
ranked below Taylor Wimpey by market capitalisation. This comparator
group is felt to be more appropriate given the Company’s current size
than the FTSE 250.
Additional information – Performance metrics for 2016 awards
The Remuneration Committee has further reviewed the suitability of the
PSP performance metrics in light of the Company’s 2015 performance
and has determined that for awards for 2016 and subsequently, the
FTSE TSR comparator group described above will be replaced by the
FTSE 100 and the Peer Group TSR comparator group will be amended
by the addition of Countryside Properties plc. The former will better
represent the Company’s current position as a constituent of the FTSE
100 and the latter will further increase the size of the peer comparator
group following Countryside’s admission to listing on the London Stock
Exchange on 17 February 2016.
www.taylorwimpey.co.uk
External non executive director positions
Subject to Board approval and provided that such appointments fall
within the general requirements of the Code (and do not give rise to
any conflict issues which cannot be managed by the Board and the
Executive Director), Executive Directors are permitted to take on non
executive positions with other companies. Executive Directors are
permitted to retain their fees in respect of such positions. Any such
appointments would be the subject of a public announcement to
the London Stock Exchange.
On 11 November 2014 Pete Redfern was appointed as an independent
non executive director to the Board of Travis Perkins plc where he also
initially served on its Audit and Remuneration Committees. His fees for
2014 were £55,000 per annum and he received £9,000 for the period
from his appointment to the end of 2014. In addition to the Board,
he now currently serves on the Remuneration Committee and his
current fees total £57,000 per annum
Remuneration Policy for the wider workforce
When setting the policy for Executive Directors, the Committee is
made fully aware of pay structures across the workforce. In addition,
the Committee will conduct a formal review of remuneration across
the Group and for all levels of employee every three years.
Virtually all of the Company’s employees participate in incentive
arrangements and many employees can elect to take their performance
related payment in shares rather than cash, further enhancing the
link and alignment between shareholder value and employee reward
throughout the Company, which both the Company and the Committee
remain keen to promote.
In the past, the Company has also operated targeted long term incentive
arrangements, such as the Land Value Plan (LVP) for senior divisional
and functional roles with payouts in shares. The LVP operated from
2012 to 2014 and was open to designated senior executives below
Executive Director level. It was designed to reward participants
for managing the landbank in a way which added value, through
a combination of managing and adding value to the existing land
portfolio and buying land and adding value over and above the base
case for each acquisition. Performance was measured over a three
year period and awards to senior participants were in shares which
were required to then be retained for 12 months. The LVP addressed
a strategic imperative for a period and has now been withdrawn,
with participants instead considered for full participation in the PSP.
No Executive Director participated in the LVP.
The Company also offers both Sharesave and SIP schemes to all
eligible UK employees with more than three months’ service.
Remuneration Policy on recruitment or promotion
Base salary levels will be set in accordance with the current
Remuneration Policy, taking into account the experience and calibre
of the individual. Where appropriate, the Company may offer a below
market salary initially with a view to making above market and workforce
increases over a number of years to reach the desired salary positioning,
subject to individual and Company performance. Benefits and pension
will be provided in line with those offered to other Executive Directors,
with relocation expenses/arrangements provided for if necessary.
Tax equalisation may also be considered if an executive is adversely
affected by taxation due to their employment with the Company.
Legal fees and other costs incurred by the individual may also be paid
by the Company, if considered appropriate and reasonable to do so.
The variable pay elements that may be offered will be subject to the
maximum levels described in the policy table above. The Company
may also apply different performance measures if it feels these
appropriately meet the strategic objectives and aims of the
Company whilst incentivising the new appointment.
The above policy applies to both an internal promotion to the Taylor
Wimpey plc Board or an external hire.
In the case of an external hire, the Company may choose to buy-out
any incentive pay or benefit arrangements which would be forfeited
on leaving the previous employer. This will only occur where the
Company feels that it is a necessary requirement to aid the recruitment.
The replacement value would be provided for, taking into account the
form (cash or shares) and timing and expected value (i.e. likelihood
of meeting any existing performance criteria) of the remuneration
being forfeited. Replacement share awards, if used, will be granted
using Taylor Wimpey’s existing share plans wherever and to the extent
possible, although in exceptional circumstances awards may also
be granted outside of these schemes if necessary and as permitted
under the Listing Rules.
In the case of an internal hire including a promotion, as previously
reported, the Company will honour any commitments entered into prior
to their appointment to the Board even where it is not consistent with
the policy prevailing at the time such commitment is fulfilled.
Directors’ contracts
It is the Company’s policy that Executive Directors should have contracts
of employment providing for a maximum of one year’s notice either way.
This meets the latest proposals in the Principles Of Remuneration issued
by The Investment Association during 2015. Service contracts for
all Executive Directors and letters of appointment for all Non Executive
Directors are available for inspection as described in the Notice of
Annual General Meeting.
Each of the Executive Directors’ service contracts provides for:
• The payment of a base salary (details of which are set out on
page 77).
• An expensed Company-provided car or a cash allowance in lieu;
a fuel allowance; life assurance; and private medical insurance
(details of which are set out on page 79).
• Employer’s contribution to a pension scheme (details of which
are set out on page 85).
• A notice period by either side of 12 months.
• A provision requiring a Director to mitigate losses on termination.
The service contract for each of Pete Redfern and James Jordan
additionally provides for a pension allowance.
Each service contract contains the following performance-related
provisions:
• Participation in the STIA.
• Participation in one or more LTIP.
In respect of pay in lieu of notice (PILON), it is the Company’s policy
that liquidated damages should not automatically apply on the
termination of an Executive Director’s contract. Such contracts do
provide for PILON to be paid, with the amount determined having regard
to normal legal practices. In accordance with this approach, payment
for early termination of contract (without cause) by the Company is to be
determined, in the case of each Executive Director, having regard to
normal legal principles which require mitigation of liability on a case-by-
case basis. Any such payment would typically be determined by
reference to the main elements of a Director’s remuneration, namely:
salary, STIA entitlement (subject to Committee discretion as appropriate),
benefits-in-kind and pension entitlements. Phased payments will be
considered by the Company where appropriate. There are no change
of control provisions that apply in relation to the service contract of
any Executive Director.
75
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Remuneration Report continued
Other than in certain ‘good leaver’ circumstances (including, but not
limited to, redundancy, ill-health or retirement), no STIA would usually
be payable unless the individual remains employed and is not under
notice at the payment date. Any STIA paid to a ‘good leaver’ would
be based on an assessment of their and the Company’s performance
over the applicable period and pro-rated for the proportion of the
STIA year worked.
Where an Executive Director is considered by the Remuneration
Committee to be a good leaver, deferred bonus awards (shares)
would vest. In other circumstances, awards would lapse.
With regard to long term incentive awards, the LTIP rules provide
that other than in certain ‘good leaver’ circumstances, awards lapse
on cessation of employment. Where an individual is a ‘good leaver’,
the Committee’s normal policy is for the award to vest on cessation
of employment following the application of performance targets no
later than the normal vesting date of the award and a pro-rata reduction
to take account of the proportion of the applicable performance period
outstanding post the cessation. The Committee has discretion to deem
an individual to be a ‘good leaver’. In doing so, it will take account
of the reason for the departure and the performance of the
individual through to the time of departure.
In situations where an Executive Director is dismissed, the Committee
reserves the right to make additional exit payments where such
payments are made in good faith:
• In discharge of an existing legal obligation (or by way of damages
for breach of such an obligation); or
• By way of settlement or compromise of any claim arising in
connection with the termination of a Director’s office or employment.
The terms of engagement of the Chairman and the Non Executive
Directors are regulated by letters of appointment over a term of
three years, which are reviewed annually. Both the Company and
the aforementioned Directors have a notice period of six months
and the Directors are not entitled to compensation on termination
other than for the normal notice period if not worked out.
Service contracts and letters of appointment may be inspected
at the Company’s Registered Office during normal business hours.
Legacy arrangements
Any commitment made which is consistent with the approved
Remuneration Policy in force at the time that commitment was
made will be honoured, even where it is not consistent with the
policy prevailing at the time such commitment is fulfilled.
Annual Report on Remuneration Unaudited information
This part of the Report has been prepared in accordance with Part 3
of the revised Schedule 8 set out in the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008
(as amended), and 9.8.6R/9.8.8 of the Listing Rules. This Annual Report
on Remuneration will be put to an advisory shareholder vote at the
2016 AGM. The information in the Implementation of the Remuneration
Policy during 2015 section on pages 78 to 85 has been audited.
Remuneration Committee
The role of the Remuneration Committee (the ‘Committee’) is to
recommend to the Board a strategy and framework for remuneration
for Executive Directors and senior management in order to attract
and retain leaders who are focused and incentivised to deliver the
Company’s strategic business priorities within a remuneration framework
which is aligned with the interests of our shareholders and thus designed
to promote the long term success of the Company.
The Remuneration Committee has clearly defined terms of reference
which are available on the Company’s website www.taylorwimpey.co.uk/
corporate/investor-relations/corporate-governance. The Committee’s
main responsibilities are to:
• Establish and maintain formal and transparent procedures for
developing policy on executive remuneration and for determining
the remuneration packages of individual Directors, and to monitor
and report on them.
• Determine the remuneration, including pension arrangements,
of the Executive Directors.
• Monitor and make recommendations in respect of remuneration
for the tier of senior management one level below that of the Board.
• Approve annual and long term incentive arrangements together
with their targets and levels of awards;
• Determine the level of fees for the Chairman of the Board.
• Select and appoint the external advisers to the Committee.
The Committee currently comprises three Independent Non
Executive Directors and the Chairman of the Board. Margaret Ford
is the Committee Chairman and the other members of the Committee
are Kate Barker, Kevin Beeston and Rob Rowley. Membership of the
Committee is, and was throughout 2015, in line with the Code.
Details of attendance at Remuneration Committee meetings held
during 2015 appear on page 70.
No Director or other executive is involved in any decisions about
his/her own specific remuneration.
Advice to the Committee
The Committee keeps itself fully informed on developments and best
practice in the field of remuneration and it seeks advice from external
advisers when appropriate.
The Committee appoints its own independent remuneration advisers
and during the year it continued to retain the services of New Bridge
Street, part of Aon PLC.
New Bridge Street is a signatory to the Remuneration Consultants’
Group Code of Conduct. It provides no other services to the Company.
Although the wider Aon PLC group of companies provide insurance
broking and pension administration support services to the Company,
the Committee is entirely satisfied that the provision of such services
does not create any conflicts of interest. New Bridge Street was
appointed in February 2009 following a comprehensive tendering
process. The Committee reviews the performance and
independence of its advisers on an annual basis.
The Committee also receives legal advice from Slaughter and May
as and when necessary. This generally relates to technical advice
on share schemes and also with regard to any senior appointments
and termination arrangements.
The fees paid to the Committee’s advisers in 2015 were: New Bridge
Street £88,000 (2014: £80,000) representing a full year’s appointment.
No significant amount of advice was sought from Slaughter and May
during the year.
Pete Redfern, the Chief Executive; James Jordan, the Group Legal
Director and Company Secretary; and the Group Human Resources
Director each attend Committee meetings by invitation only but are not
present for any discussions that relate directly to their own remuneration.
www.taylorwimpey.co.uk
Chairman and Non Executive Directors
The terms of engagement of the Chairman and the Non Executive Directors are regulated by letters of appointment as follows:
Name
Kevin Beeston
Kate Barker
Margaret Ford
Mike Hussey
Rob Rowley
Humphrey Singer
Date of appointment as a Director Date of initial letter of appointment
Term of appointment
Notice period by
Company (months)
Notice period by
Director (months)
1 July 2010
21 April 2011
25 April 2013
1 July 2011
1 January 2010
9 December 2015
13 May 2010
7 February 2011
19 March 2013
30 June 2011
1 December 2009
9 December 2015
3 years, reviewed annually
3 years, reviewed annually
3 years, reviewed annually
3 years, reviewed annually
3 years, reviewed annually
3 years, reviewed annually
6
6
6
6
6
6
6
6
6
6
6
6
How the Remuneration Policy will be applied in 2016
Base Salary
The Committee reviewed the Executive Directors’ salaries in February
2016 and has decided to award increases of 3% for each Executive
Director, with effect from 1 April 2016, in line with the equivalent general
increase made to all employees (subject to a very small number
of exceptions).
The salaries of the Executive Directors effective from 1 April 2016 will
be as follows:
Name
Pete Redfern
Ryan Mangold
James Jordan
Salary at
1 April 2015
Salary at
1 April 2016
Increase
£795,849
£400,000
£369,501
£819,724
£412,000
£380,586
3%
3%
3%
Short term incentive arrangements (STIA)
The STIA performance metrics and their weightings for 2016 are shown
in the table below. The targets themselves, as they relate to the current
financial year, are deemed to be commercially sensitive. However, detailed,
retrospective disclosure of the targets and performance against them
will be provided in next year’s Remuneration Report.
Measure
Strategic objective
Group EBIT
To increase profit
Cash conversion
Delivering sustainable growth
RONA
Driving capital efficiency
Customer Service Caring about our customers
Weighting
40%
20%
20%
20%
The above metrics and weightings reflect an increase in weighting
from 35% to 40% with regard to the Group EBIT measure and the
replacement of the Margin measure with the RONA measure which
has been included in the 2016 STIA so as to reflect the importance of
driving the Group’s capital efficiency. As mentioned earlier in this Report,
Margin will however remain a very important area of ongoing focus
across the Group and will also continue to form part of the financial
underpin test conducted by the Remuneration Committee prior to
any vesting taking place under the PSP. Customer Service remains
an area of particular focus by the Company and challenging targets
have again been put in place, in order to both reflect this and the
weighting attached to this measure following the increase in weighting
that was implemented in 2015.
Long Term Incentive Plans
Taylor Wimpey Performance Share Plan (PSP)
The annual awards granted to Executive Directors in 2016 will be subject
to the following performance conditions:
Weighting
(% of total
award)
30%
Below
threshold
(0% vesting)
Threshold
(20% vesting)
Below
Index
Equal to
Index
Median
Maximum
(100%
vesting)
Index +
8% p.a.
Upper
Quartile
20% Less than
median
25% Less than
18%
25% Less than
65%
18%
26%
65%
70%
TSR v Direct Peer Group
Index
TSR v FTSE 100
Absolute ROCE in 2018
Conversion of operating
profit into operating cash
flow averaged over a three
year performance period
(2016-2018)
Awards vest on a straight line basis between these points. The ROCE
targets are based on the absolute ROCE in 2018, defined as operating
profit, divided by the average of the opening and closing net operating
assets, which is, in turn, defined as capital employed plus intangibles
less tax balances. The Direct Peer Group Index of housebuilders is an
unweighted index comprised of Barratt Developments, Bellway, Berkeley
Homes, Bovis Homes Group, Countryside Properties, Crest Nicholson,
Galliford Try, Persimmon and Redrow.
An underlying requirement for any vesting under the current share-
based incentive plans is that at the time of approving the vesting,
the Committee must be satisfied with the overall financial performance
of the Group. This will include inter alia the Company’s ROCE and
Margin performance.
The Committee also retains the right (as part of its overall discretion)
to reduce the vesting of the award if it considers that volumes (i.e. the
number of homes sold) have not been satisfactory during the relevant
performance period.
Dividends and other distributions will accrue on all awards during the
performance period and then be released in cash when, and to the
extent that, the relevant awards vest.
76
77
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Remuneration Report continued
Non Executive Directors’ and Chairman’s fees
Fees of Non Executive Directors are determined by the Board in their absence taking into account the research carried out by independent
remuneration consultants of fees paid to non executive directors. The fees of the Chairman are determined by the Remuneration Committee
in his absence. A summary of the current fees are set out below. The fees of the Chairman and the Non Executive Directors are reviewed every
other year with any increases taking place with effect from 1 July. The Chairman’s fees were reviewed in his absence by the Board in June 2015
(having last been reviewed in 2013) and, taking into account the independent advice received from New Bridge Street, it was determined that
his annual fees should be increased by 15% with effect from 1 July 2015. The fees of the Non Executive Directors have remained unchanged
since 2013 and will be reviewed during the course of 2016:
Chairman
Basic Non Executive Director fee
Senior Independent Director fee
Audit Committee Chairman
Remuneration Committee Chairman
Annual Fees as at
1 April 2016
£295,000
£55,000
£10,000
£15,000
£15,000
All Directors will submit themselves for election or re-election, as appropriate, at the AGM in accordance with the Code.
Implementation of the Remuneration Policy during 2015
Audited information
Performance graph
This graph shows the value, by 31 December 2015, of £100 invested in Taylor Wimpey plc on 31 December 2008 compared with the value of £100
invested in the FTSE 350 and in the average of the housebuilder index introduced for the 2012 TWPSP awards onwards. The other points plotted are
the values at intervening financial year-ends. We have included Crest Nicholson in this year’s graph as they have been included in the index for the
2014 awards onwards.
Total shareholder return
Value (£)
2,500
2,000
1,500
1,000
500
0
31 Dec
08
31 Dec
09
31 Dec
10
31 Dec
11
31 Dec
12
31 Dec
13
31 Dec
14
31 Dec
15
Taylor Wimpey plc
Housebuilders Index (including Crest Nicholson)
FTSE 350 Index
Chief Executive remuneration
The table below shows the total remuneration figure for the Chief Executive over the same seven year period as is reflected in the TSR graph above.
The total remuneration figure includes the STIA and LTIP awards which vested based on performance in those years. The STIA and LTIP percentages
show the payout for each year as a percentage of the maximum.
Total Remuneration (£’000)
STIA (%)
LTIP vesting (%)
Year ending 31 December
2009
2010
2011
2012
2013
2014
2015
£1,657
£1,542
£1,674
£3,009
£6,724
100%
0%
85%
0%
82%
0%
95%
40%
90%
85%
£6,250(a)
90%
£7,019(b)
78%
94%
100%
(a) As the 2012 PSP award did not vest until March 2015, the final value of the ROCE and Margin elements of this award were not known at the time the 2014 report was prepared
and therefore an estimate of the share price at vesting was used. The 2014 single figure includes £2,402,000 in respect of the ROCE and Margin elements of the 2012 PSP award
and £1,613,115 in respect of the TSR elements of the 2011 PSP award (as TSR was measured from date of grant for the 2011 and 2012 PSP awards).
(b) The 2015 single figure includes £2,143,460 in respect of the ROCE and Margin elements of the 2013 PSP award, £1,488,085 in respect of the TSR elements of the 2012 PSP award
(as TSR was measured from date of grant for the 2012 PSP award); and £1,428,977 in respect of the TSR elements of the 2013 PSP award (as TSR was measured from 1 January
2013 for the 2013 PSP award).
(c) In order to show a more meaningful comparison of the total figures, the chart included in the Chairman’s letter on page 69 includes all of the 2013 PSP award that vested in the 2015
figure and all of the 2012 PSP award that vested in the 2014 single figure.
Director emoluments
£’000
Executive
Pete Redfern
Ryan Mangold(c)
James Jordan
Non Executive
Kevin Beeston(b)
Kate Barker
Margaret Ford
Mike Hussey
Rob Rowley
Humphrey Singer (appointed 9 December 2015)
Tony Reading (resigned 17 April 2014)
www.taylorwimpey.co.uk
Year
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
Fees &
Salary
Benefits(a)
STIA
LTIP(d)(e)
Pension(f)
Total
790
768
389
354
367
357
271
256
55
55
70
66
55
55
80
80
3
–
–
21
2,080
2,012
47
43
21
21
43
42
1
–
–
–
–
–
–
–
–
–
–
–
–
–
931
1,043
468
480
432
484
5,061
4,211
2,145
1,715
2,350
1,956
190
185
78
71
91
88
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,019
6,250
3,101
2,641
3,283
2,927
272
256
55
55
70
66
55
55
80
80
3
–
–
21
112
106
1,831
2,007
9,556
7,882
359
344
13,938
12,351
(a) Benefits include non-cash payments such as private medical insurance, life insurance, company car provision, fuel allowances, and cash payments such as car allowance taken
in lieu of a car.
(b) The Company also paid £2,000 (2014: £10,000) as a contribution towards the Chairman’s annual office and related administration costs incurred in carrying out his role.
The Chairman’s fees increased from £256,250 to £295,000 per annum with effect from 1 July 2015.
(c) Ryan Mangold was previously, until the end of 2014, a member of the salary exchange scheme operated by the Company and the amount exchanged during the year was
£0 (2014: £9,000). The Flexible Pension Arrangement is a voluntary arrangement, the effect of which is to allow members and the Company to benefit from savings in National
Insurance contributions through the sacrifice of a portion of salary, which would then be paid into a pension scheme as a Company contribution, prior to NIC being calculated.
The Scheme therefore reduces the effective salary of the individual.
(d) This column shows the vesting during 2015 and 2014 of LTIPs as set out in the table at the top of page 80. Note that the 2014 figures reported last year were based on estimates
of the value of the shares at vesting. These have been restated to reflect the actual value of the shares at the point of vesting. As explained on pages 68 and 69, the reason why this
includes vesting from awards made in both 2011 and 2012 is due to the timing of the vesting of various elements of the awards which differ as between ROCE and Margin which
are calculated on 31 December of the final year of the performance period and the TSR measures which are calculated on the third anniversary of the award. With effect from and
including the 2013 awards all measures are now tested as at 31 December.
(e) The 2014 LTIP figure includes the value of the TSR elements of the 2011 PSP awards and the ROCE and Margin elements of the 2012 PSP awards. Details of the percentage
of each award vesting are summarised in the table at the top of page 80. For an explanation on why the 2014 figure includes elements of both the 2012 and 2013 awards, please
see note (d) above.
The 2015 LTIP figure includes the TSR elements of the 2012 PSP award plus all elements of the 2013 award as the performance period for the 2012 award ended in March 2015
and all elements of the 2013 award ended on 31 December 2015. Details of the percentage of each award vesting are summarised in the table at the top of page 80.
(f) These figures represent the cash allowances payable as described in the Remuneration Policy ‘Pension’ section. For Pete Redfern this is 20% of salary up to a scheme specific
cap (notional earnings cap) and 25% of salary above the cap; for Ryan Mangold this is 20% of salary, split between a cash allowance and Company pension contribution as reported
in Non-Group Pension Arrangements on page 85; and for James Jordan this is 20% of salary up to a scheme specific cap (notional earnings cap) and 28% of salary above the cap.
78
79
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Annual Report and Accounts 2015
Remuneration Report continued
LTIP awards included in 2014 single figure
LTIP award
2011 PSP
2012 PSP
Performance target
Weighting
TSR FTSE
TSR Peer Group
ROCE
Margin
20%
20%
30%
30%
% Vesting
(max 100%)
Date of end of
performance
period
Date of vesting
100% 31/03/2014
01/04/2014
93.85% 31/03/2014
01/04/2014
100% 31/12/2014
05/03/2015
100% 31/12/2014
05/03/2015
Share price
at vesting
(pence)
119.4
119.4
149.0(a)
149.0(a)
(a) The share price shown is as at 5 March 2015; in the 2014 Remuneration Report these awards had not yet vested, therefore the share price at vesting was calculated as the average
of the share prices for the dealing days in the last three months (October to December 2014). See notes (d) and (e) on page 79 for an explanation on why more than one year of LTIP
awards has been included in the single figure.
LTIP awards included in 2015 single figure
LTIP award
2012 PSP
2013 PSP(a)
Performance target
Weighting
TSR FTSE
TSR Peer Group
TSR FTSE
TSR Peer Group
ROCE
Margin
20%
20%
20%
20%
30%
30%
% Vesting
(max 100%)
Date of end of
performance
period
Date of vesting
100% 04/03/2015
05/03/2015
71.8% 04/03/2015
05/03/2015
100% 31/12/2015
01/03/2016
100% 31/12/2015
01/03/2016
100% 31/12/2015
01/03/2016
100% 31/12/2015
01/03/2016
Share price
at vesting
(pence)
149.0
149.0
192.16(a)
192.16(a)
192.16(a)
192.16(a)
(a) The share price shown is the average of the share price for the dealing days in the last three months (October to December 2015). See notes (d) and (e) on page 79 for an
explanation on why more than one year of LTIP awards has been included in the single figure.
Short term incentive arrangements (STIA) in respect of 2015
For 2015, the Committee measured performance against each individual performance target, which is directly linked to the achievement
of the Company’s strategy, as follows:
Measure
EBIT
Strategic objective
To increase aggregate profit
Weighting
35%
Operating Margin
Driving further UK operating
margin progression
Cash
Driving increased cash
generation and retention as
a proportion of PBIT
Customer Service
Improving and delivering
customer service
Total
25%
20%
20%
100%
% of
maximum
% of salary
paid in cash
% of salary
deferred in
shares
35
23.33
11.67
Result
£637m
Summary
of targets
Entry £570m
Target £594m
Stretch £618m
Entry 18.5%
20.3%
23
15.33
7.67
Target 19%
Stretch 20.5%
Entry 50%
Target 60%
Stretch 65%
67.0%
20
13.33
6.67
Entry 83%
81.0%
0
0
0
Target 89%
Stretch 93%
78
52
26
The amounts paid to Pete Redfern, Ryan Mangold and James Jordan in respect of 2015 are set out in the remuneration table on page 79.
www.taylorwimpey.co.uk
Vesting of long term incentive awards in 2015
The BIS Regulations require the value of long-term incentives vesting, by reference to performance periods ending in the financial year being reported
on, to be included in the single figure. This applies to the TSR elements of the March 2012 TWPSP awards and all elements of the March 2013
TWPSP award.
The performance period for the TSR elements of the 2012 award ended on 5 March 2015, which was after the Preliminary Announcement of the
Company’s 2014 results, and the performance outcome was independently calculated by New Bridge Street.
As reported last year, the performance period for all elements of annual PSP awards made from 2013 and for subsequent years now ends on
31 December. Consequently, the performance period for all elements of the 2013 award ended on 31 December 2015 and the final measurement
was undertaken based on this date.
The outcomes were as follows:
Award
Measure
Weighting
Vesting scale
5 March 2012(a) TSR FTSE
20%
No vesting below median, 20% vests at median, 100% vests at upper
quartile. Pro-rata vesting between median and upper quartile
Performance
achieved
% of this award
vesting
10th out of 203
100%
TSR Peer
Group
20%
No vesting below median, 20% vests at Index TSR, 100% vests
at Index TSR + 8% p.a. (multiplicative). Pro-rata vesting in between
48.6 points above
Peer Group index
71.8%
6 March 2013(b) TSR FTSE(c) 20%
TSR Peer(d)
Group
ROCE(e)
20%
30%
Margin(f)
30%
No vesting below median, 20% vests at median, 100% vests at upper
quartile. Pro-rata vesting between median and upper quartile
5th out of 204
100%
No vesting below median, 20% vests at Index TSR, 100% vests
at Index TSR + 8% p.a. (multiplicative). Pro-rata vesting in between
73.9% above Peer
Group index
100%
No vesting below median, 20% vests at 10% ROCE, 100% vests
at 20% ROCE. Pro-rata vesting in between
No vesting below median, 20% vests at 11.5% margin, 100% vests
at 16% margin. Pro-rata vesting in between
27.1%
100%(b)
20.3%
100%(c)
(a) All outcomes are as at 5 March 2015.
(b) All outcomes are as at 31 December 2015.
(c) Median target is 105th ranking and upper quartile target is 52nd ranking as averaged for dealing days in last three months of the performance period ended 31 December 2015.
(d) Median is placing 102.5 and upper quartile is placing 51.5 as averaged for dealing days in last three months of the performance period ended 31 December 2015.
In deciding whether, and to what extent, any vesting of awards should take place under any LTIP, the Committee also considers the overall financial
performance of the Company during the period. The Committee has determined that the overall financial performance of the Company has been
strong in respect of the performance periods of the above LTIPs and therefore determined that the 2013 LTIP should vest in full based on the
achievement in full of all performance measures.
80
81
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Remuneration Report continued
www.taylorwimpey.co.uk
Change in Company performance relative to change in remuneration
Ryan Mangold
Profit before tax, interest and exceptional items
Dividends paid per ordinary share
– interim 2015/interim 2014 (0.49p/0.24p)
– final 2015/final 2014 (1.18p/1.32p)
– special 2015/special 2014 (7.68p/1.54p)
2015
2014
Change (%)
£637.0m
£480.7m
9.35p
3.10p
32.5
201.6
Employee pay in aggregate (see Note 7 to the financial statements)
Employee pay average per employee (see Note 7 to the financial statements)
£195.4m
£45,869
£173.6m
£45,009
12.6
1.9
Change in Chief Executive pay compared to Taylor Wimpey employees
The table below shows the percentage year-on-year change in salary, benefits and annual bonus earned between 2014 and 2015 for the
Chief Executive compared to the average pay of Taylor Wimpey employees during the year.
Pete Redfern
Average pay of Taylor Wimpey employees
Salary
3.0%
3.0%
Benefits
9.3%
3.0%
STIA
-10.7%
3.0%
Directors’ share-based rewards and options
Performance awards were made in the year under the TWPSP scheme as summarised below:
Pete Redfern
Award
Type
TWPSP Nil cost
options
Number of
shares
Face value
(% of salary)
1,035,958
£1,545,338
(200%)
Ryan Mangold TWPSP Nil cost
options
James Jordan TWPSP Nil cost
options
476,965
480,980
£711,488
(200%)
£717,477
(200%)
Performance conditions
Performance period
% vesting at
threshold
performance
25% on ROCE; 25% on cash
conversion; 20% on
TSR v a FTSE Group(a); 30% on
TSR v Peer Group index
01/01/2015 – 31/12/2017
20%
As above
As above
As above
As above
As above
As above
(a) ‘a FTSE Group’ covers the group of 50 companies immediately above, and 50 companies immediately below, the FTSE 100 point, as described earlier on page 74.
Details of options and conditional awards over shares held by Directors who served during the year are as follows:
Pete Redfern
Outstanding
shares at
1 January 2015
Granted/
Awarded in
2015 (number)
Dividend
re-investment
shares added
during 2015
(number)
Special Dividend
adjustment
shares added
during 2015
(number)
Exercised/
vested
(number)
Lapsed
(number)
Outstanding
shares as at
31 December
2015
Exercise
price
(pence)
Market price
on exercise
(pence) Date of grant
Date from
which
exercisable/
capable of
vesting
Expiry date
Plan
Deferred
Shares (STIA)(a)
Deferred
Shares (STIA)(a)
Deferred
Shares (STIA)(a)
Deferred
Shares (STIA)(a)
Performance
Share Plan(c)
Performance
Share Plan(c)
Performance
Share Plan(c)
Performance
Share Plan(c)
387,541
256,696
300,237
–
–
–
–
12,643
14,787
–
222,031(b)
10,936
2,906,623
1,784,608
1,222,746
–
–
–
–
1,035,958(g)
–
–
–
–
–
–
–
–
–
–
–
387,541
–
–
–
–
–
–
–
–
269,339
315,024
232,967
2,742,687
163,936
–
74,487(e)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,859,095
1,222,746
1,035,958
63,331
10,000
24.04
90.00
–
–
–
–
–
–
–
–
159.19
23.03.12
24.03.15
23.09.15
–
–
–
25.03.13
26.03.16
25.09.16
25.03.14
26.03.17
25.09.17
25.03.15
26.03.18
25.09.18
145.97
05.03.12
05.03.15(d)
04.09.15
–
–
–
–
–
06.03.13
06.03.16(f)
05.09.16
04.03.14
04.03.17(f)
03.09.17
09.03.15(d)
09.03.18(f)
08.09.18
11.10.11
01.12.16
31.05.17
07.10.14
01.12.17
31.05.18
Sharesave Plan(a)
Sharesave Plan(a)
63,331
10,000
–
–
Total
6,931,782
1,257,989
38,366
74,487
3,130,228
163,936
5,008,460
Plan
Deferred
Shares (STIA)(a)
Deferred
Shares (STIA)(a)
Deferred
Shares (STIA)(a)
Deferred
Shares (STIA)(a)
Performance
Share Plan(c)
Performance
Share Plan(c)
Performance
Share Plan(c)
Performance
Share Plan(c)
Plan
Deferred
Shares (STIA)(a)
Deferred
Shares (STIA)(a)
Deferred
Shares (STIA)(a)
Deferred
Shares (STIA)(a)
Performance
Share Plan(c)
Performance
Share Plan(c)
Performance
Share Plan(c)
Performance
Share Plan(c)
Outstanding
shares at
1 January 2015
Granted/
Awarded in
2015 (number)
Dividend
re-investment
shares added
during 2015
(number)
Special Dividend
adjustment
shares added
during 2015
(number)
Exercised/
vested
(number)
Lapsed
(number)
Outstanding
shares as at
31 December
2015
Exercise
price
(pence)
Market price
on exercise
(pence) Date of grant
Date from
which
exercisable/
capable of
vesting
Expiry date
157,784
110,629
138,231
–
–
–
–
5,449
6,808
–
102,225(b)
5,035
1,183,410
769,123
562,963
–
–
–
–
476,965(g)
–
–
–
–
–
157,784
–
–
–
–
–
–
–
–
116,078
145,039
107,260
1,116,665
66,745
–
32,101(e)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
801,224
562,963
476,965
10,623
10,000
–
–
–
–
–
–
–
–
84.72
90.00
159.19
23.03.12
24.03.15
23.09.15
–
–
–
25.03.13
26.03.16
25.09.16
25.03.14
26.03.17
25.09.17
25.03.15
26.03.18
25.09.18
145.97
05.03.12
05.03.15(d)
04.09.15
–
–
–
–
–
06.03.13
06.03.16(f)
05.09.16
04.03.14
04.03.17(f)
03.09.17
09.03.15(d)
09.03.18(f)
08.09.18
08.10.13
01.12.16
31.05.17
07.10.14
01.12.17
31.05.18
Sharesave Plan(a)
Sharesave Plan(a)
10,623
10,000
–
–
Total
2,942,763
579,190
17,292
32,101
1,274,449
66,745
2,230,152
James Jordan
Outstanding
shares at
1 January 2015
Granted/
Awarded in
2015 (number)
Dividend
re-investment
shares added
during 2015
(number)
Special Dividend
adjustment
shares added
during 2015
(number)
Exercised/
vested
(number)
Lapsed
(number)
Outstanding
shares as at
31 December
2015
Exercise
price
(pence)
Market price
on exercise
(pence) Date of grant
Date from
which
exercisable/
capable of
vesting
Expiry date
179,930
119,181
139,396
–
–
–
–
5,870
6,866
–
103,086(b)
5,077
1,349,503
828,568
567,703
–
–
–
–
480,980(g)
–
–
–
–
–
179,930
–
–
–
–
–
–
–
–
125,051
146,262
108,163
1,273,388
76,115
–
34,583(e)
–
–
–
–
–
–
–
–
–
–
–
–
863,151
567,703
480,980
63,331
10,000
–
–
–
–
–
–
–
–
24.04
90.00
159.19
23.03.12
24.03.15
23.09.15
–
–
–
25.03.13
26.03.16
25.09.16
25.03.14
26.03.17
25.09.17
25.03.15(d)
26.03.18
25.09.18
145.97
05.03.12
05.03.15(d)
04.09.15
–
–
–
–
–
06.03.13
06.03.16(f)
05.09.16
04.03.14
04.03.17(f)
03.09.17
09.03.15(d)
09.03.18(f)
08.09.18
11.10.11
01.12.16
31.05.17
07.10.14
01.12.17
31.05.18
Sharesave Plan(a)
Sharesave Plan(a)
63,331
10,000
–
–
Total
3,257,612
584,066
17,813
34,583
1,453,318
76,115
2,364,641
Details of options over shares held by Directors who served during the year:
(a) Vesting is not dependent on any performance conditions.
(b) Market value per share on date of grant 25 March 2015 was 156.6 pence.
(c) Vesting is subject to the achievement of performance conditions.
(d) Or later publication of the preliminary full year or half year results announcement on which the associated performance condition will be calculated.
(e) Adjustment to number of shares in award to reflect the impact of the Special Dividend of 7.68 pence for 2015 paid on 3 July 2015 when the market value per share was
191.3 pence.
(f) At later publication of the preliminary full year or half year results announcement on which the associated performance condition will be calculated.
(g) Market value per share on date of grant 9 March 2015 was 147.8 pence.
(h) Vesting will be 20% for the 2015 award (2014 award: 20%) for threshold performance (50th percentile for TSR for FTSE Group, Index TSR for Housebuilder Index; 16% ROCE
(2014 award: 10%); 65% cash conversion (2014 award: 14% margin)) and 100% (2014 award: 100%) for upper quartile performance (75th percentile for TSR vs FTSE Group;
index + 8% p.a (multiplicative) for Housebuilder Index, 24% ROCE (2014 award: 20%); 70% cash conversion (2014 award: 18.5% margin)) with straight line vesting between
these two thresholds.
There have been no variations to the terms and conditions or performance criteria for outstanding share awards during the financial year. The market
price of the ordinary shares on 31 December 2015 was 203.1 pence and the range during the year was 124.1 pence to 205.0 pence. Details of any
share awards made to Executive Directors during 2016 will be included in the 2016 Remuneration Report.
–
–
–
–
–
–
–
–
–
–
–
–
82
83
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Remuneration Report continued
Directors’ interests in shares of the Company
Share ownership guidelines
These Taylor Wimpey share ownership guidelines are designed to encourage greater levels of shareholding by executives at various levels within
the Company for the purpose of alignment with the Company’s shareholders which the Committee strongly believes is very important. The guidelines
cover the Executive Directors and those executives who participate in long term incentive plans with all participating executives required to build up
shareholdings through the retention of shares vesting under the Company’s share plans.
The level of shareholding for Executive Directors to attain is two times base salary. Executive Directors are expected to achieve a holding equivalent
to one times base salary within five years of their appointment and although there will be no set time limit for achieving a two times salary holding,
each Executive Director is required to agree a personal plan with the Chairman on the target to be achieved within an agreed time frame. Executive
Directors are also required to retain at least 50% of their net of taxes gain arising from any shares vesting or acquired pursuant to the Company’s
long term incentive share plans, until such time as the guidelines have been met. Only beneficially owned shares count toward the guidelines, thus
the Executive Directors’ deferred portion of STIA vestings are excluded. Members of the Group Management Team (GMT) and other designated
executives are currently expected to maintain a shareholding generally in direct proportion to their level of participation in the Company’s discretionary
share plans. Each participant will be required to retain at least 50% of shares vesting or acquired net of taxes pursuant to the Company’s long term
incentive plans until such guidelines are met. The Committee will keep the guidelines under regular review.
As mentioned earlier in this Report, any shares that vest under the 2014 award must, as a standard requirement, be retained by executives for at
least 12 months and for at least 24 months under later awards. The Chairman and the Non Executive Directors are also encouraged to hold shares
in the Company in order to align their interests with those of shareholders.
Directors’ interests in 1p ordinary shares held (fully paid) (ordinary shares) are as set out in the table below:
Beneficially owned
Outstanding interests in share plans
Share interests expressed as a percentage of salary
Director
at 1/1/15
(ordinary
shares)(a)(e)
at 31/12/15
(ordinary
shares)(e)
STIA(b)
TWPSP
TWSOP
Sharesave
Kevin Beeston
1,155,562
1,155,562
–
–
Pete Redfern
2,688,789
3,330,956
817,330
4,117,799
Ryan Mangold
636,792
892,399
368,377
1,841,152
James Jordan
1,309,330
1,561,034
379,476
1,911,834
Kate Barker
Margaret Ford
Mike Hussey
Rob Rowley
40,000
84,940
150,000
200,000
Humphrey Singer
0
40,000
84,940
150,000
200,000
25,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
73,331
20,623
73,331
–
–
–
–
–
Value of shares
(including any SIP shares)
as at 31/12/15; salary
as at 31/12/15(c)
Value of shares
(including any SIP shares)
as at 25/02/16;
salary as at 1/4/16(d)
Excluding STIA
shares v the
shareholding
guidelines
Including STIA
shares (for
information
only)(e)
Excluding STIA
shares v the
shareholding
guidelines
Including STIA
shares (for
information
only)(e)
850%
453%
858%
960%
552%
968%
739%
394%
746%
835%
480%
841%
(a) Or date of appointment.
(b) Only the net amount of shares has been included in this column.
(c) This is the percentage of shareholding achieved at 31 December 2015 towards the targets described on page 73 calculated on 2015 salary and at 31 December 2015 share price.
Salaries as at 31 December 2015 for Pete Redfern, Ryan Mangold and James Jordan were £795,849, £400,000 and £369,501 respectively.
(d) This is the percentage of shareholding achieved at 31 December 2015 towards the targets described on page 73 calculated on 1 April 2016 salary and at 25 February 2016 share
price. Salaries as at 1 April 2016 for Pete Redfern, Ryan Mangold and James Jordan will be £819,724 £412,000 and £380,586 respectively.
(e) Including partnership and matching shares held under the Share Purchase Plan (SIP) described on page 73.
Note: The share price on 31 December 2015 and used in the above calculation was 203.1 pence per share and on 25 February 2016 was 181.8 pence per share. Note: The above table
does not include the deferral into shares of 33% of the 2015 STIA for any Executive Director.
The only changes to the Directors’ interests as set out above during the period between 31 December 2015 and 29 February 2016 were the regular
monthly purchases of shares and 1:1 matching by the Company under the Share Incentive Plan by Pete Redfern (320 shares) and James Jordan
(320 shares).
www.taylorwimpey.co.uk
Directors’ pension entitlements
Defined benefit schemes
The Taylor Wimpey Pension Scheme
Pete Redfern and James Jordan are members of the Taylor Wimpey Pension Scheme (TWPS). The following table sets out the transfer
value of their accrued benefits under the TWPS calculated in a manner consistent with ‘The Occupational Pension Schemes (Transfer Values)
Regulations 2008’.
Normal
retirement
Age
Accrued
pension as at
31/12/14
Increase in
accrued
pension from
31/12/14 to
31/12/15
Accrued
pension as at
31/12/15(a)
Transfer value
gross of
Director’s
contributions at
31/12/15(b)
Transfer value
gross of
Director’s
contributions at
31/12/14(b)
Increase
(decrease) in
transfer value
from 31/12/14
to 31/12/15
less Director’s
contributions(c)
Increase in
transfer value
from 31/12/14
to 31/12/15 less
inflation
Transfer value
of accrued
pension
increase
less Director’s
contributions
62
62
14,440
26,697
202
380
14,642
27,077
236,626
576,448
241,877
559,151
(5,251)
17,297
–
–
–
–
Director
Pete Redfern
James Jordan
(a) The George Wimpey Staff Pension Scheme (GWSPS) closed to future accrual on 31 August 2010 so pension accrual ceased on that date. Members of the GWSPS were
transferred into the TWPS on 1 October 2013 and there was no change to members’ benefit entitlement. Pension accrual shown above is the amount which would be paid
annually on retirement based on service to 31 August 2010. Pension benefits include a two thirds spouse’s pension. Pensions accrued up to 5 April 2006 are guaranteed to
increase in payment in line with inflation limited each year to 5%. Pensions accrued after 5 April 2006 are guaranteed to increase in payment in line with inflation limited each
year to 2.5%. Pensions accrued up to 5 April 2009 will revalue in deferment in line with inflation subject to an overall cap of 5% per annum. Pensions accrued after 5 April
2009 will revalue in deferment in line with inflation subject to an overall cap of 2.5% per annum. We have only taken into account defined benefits accrued over the period
to 31 August 2010 and have not included any Defined Contribution pension benefits accrued after this date.
(b) Transfer values have been calculated in accordance with the Occupational Pension Schemes (Transfer Value) Regulations 2008.
(c) The transfer value includes the effect of fluctuations due to factors beyond the control of the Company and Directors, such as financial market movements.
Note: The GWSPS closed to future accrual on 31 August 2010 and so no contributions were made after 31 August 2010.
There was no change to benefits during the year and consequently no difference between the changes to any Director’s pension benefits
in comparison with those of other employees.
Non-Group pension arrangements
Ryan Mangold has non-Group pension arrangements, to which contributions were paid by the Company as set out below:
Ryan Mangold
2015
(£)
2014
(£)
40,000
34,000
Notes:
Ryan Mangold also received a pension allowance of £37,787 in 2015 (2014: £37,000) in lieu of Company pension contributions over the Annual Allowance limit introduced
in April 2011 of £40,000.
Pete Redfern and James Jordan received cash allowances of £190,000 (2014: £185,000) and £91,000 (2014: £88,000) respectively in lieu of Company pension contributions.
Statement of shareholder voting
At the 2015 Annual General Meeting, the result of the shareholders’ vote on the Company’s Remuneration Report for 2014 was:
For
Against
Withheld
2015
(Votes)
2014
(Votes)
1.9 billion
1.9 billion
(99%)
(99%)
18.9 million 10.8 million
(1%)
(1%)
35 million
8.6 million
As stated earlier, the Remuneration Committee has consulted further with our shareholders on remuneration matters during the year. We hope that
shareholders will, again, support the Remuneration Report at the AGM on 28 April 2016.
Approval
This Remuneration Report was approved by the Board of Directors on 29 February 2016
and signed on its behalf by the Remuneration Committee Chairman:
Baroness Ford of Cunninghame
29 February 2016
84
85
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Annual Report and Accounts 2015
Statutory, Regulatory and Other Information
www.taylorwimpey.co.uk
Introduction
This section contains the remaining matters on which the Directors
are required to report each year, which do not appear elsewhere
in this Directors’ Report. Certain other matters which are required
to be reported on appear in other sections of this Annual Report
and Accounts as detailed below:
• An indication of likely future developments in the business of the
Company and its subsidiaries appears in the Strategic Report
on pages 4 to 41.
• The Remuneration Report appears on pages 68 to 85.
• The reporting on the Company’s carbon footprint appears
on page 29.
• A list of the subsidiary and associated undertakings, including
branches outside the UK, principally affecting the profits or net
assets of the Group in the year appears on pages 142 to 145.
• Changes in asset values are set out in the consolidated
balance sheet on page 100 and in the Notes to the accounts
on pages 103 to 146.
• The Group’s profit before taxation and the profit after taxation
and minority interests appear in the consolidated income statement
on page 98 and in the Notes to the accounts on pages 103 to 146.
• A detailed statement of the Group’s treasury management
and funding is set out in Note 19 on pages 119 to 122.
• A statement that this Annual Report and Accounts meets the
requirements of Provision C.1.1 of the UK Corporate Governance
Code (the ‘Code’), is set out in the Corporate Governance Report
on page 57.
• Details of the Company’s long-term incentive schemes as required by
LR 9.4.3 R are set out in the Remuneration Report on pages 68 to 85.
• Details of any contracts of significance subsisting during the
period under review to which a subsidiary undertaking of the
Company is a party and in which a Director of the Company is
materially interested appear in the Notice of Meeting on pages
147 to 155.
• Details of an arrangement under which a shareholder has waived or
agreed to waive any dividends, and where a shareholder has agreed
to waive future dividends, details of such waiver together with those
relating to dividends which are payable during the period under
review, appear later in this Report on page 88.
Directors
The following Directors held office throughout the year:
Kevin Beeston, Chairman;
Pete Redfern, Chief Executive;
Ryan Mangold, Group Finance Director;
James Jordan, Group Legal Director and Company Secretary;
Kate Barker, Independent Non Executive Director;
Margaret Ford, Independent Non Executive Director;
Mike Hussey, Independent Non Executive Director; and
Rob Rowley, Independent Non Executive Director and the designated
Senior Independent Director.
In addition to the above, Humphrey Singer was appointed to the Board
as an Independent Non Executive Director on 9 December 2015.
The Directors together with their biographical information are shown
on pages 44 and 45.
Retirement and re-election
The Company has determined that in accordance with the Code,
all Directors should seek election or re-election, as appropriate, at
this year’s AGM as explained in the Notes to the Notice of Meeting
and on page 53 of the Corporate Governance Report.
Each of the Directors proposed for election or re-election at the AGM
is being unanimously recommended by all of the other members of
the Board. This recommendation follows the completion of the annual
performance evaluation process, which included a detailed appraisal
of the Board, its Committees and also in respect of each Director,
which included a review of their respective time commitments. The
Board appraisal process did not include Humphrey Singer as he was
appointed to the Board following the conclusion of the 2015 process,
but was, nevertheless, subject to a detailed appraisal of his suitability
as part of the appointment process and participated in the Board
discussions which took place at the December 2015 and February
2016 Board meetings. Further information relating to the evaluation, and
the process followed with regard to Humphrey Singer’s appointment, is
set out in the Corporate Governance Report on page 49.
The Articles of Association of the Company further regulate the
appointment and removal of Directors, in addition to the Companies Act
2006 and related legislation. The Company’s Articles of Association may
be amended by special resolution of the shareholders. The various powers
and responsibilities of the Directors are described in the Corporate
Governance Report.
Qualifying third party indemnity
The Company has granted an indemnity in favour of its Directors
and officers and those of its Group companies against the financial
exposure that they may incur in the course of their professional duties
as Directors and officers of the Company and/or its subsidiaries/affiliates.
The indemnity has been put in place in accordance with section 234 of
the Companies Act 2006 in respect of which the Company took advice
from its corporate lawyers, Slaughter and May.
Audit and auditor
Each Director has, at the date of approval of this Report, formally
confirmed that:
• To the best of his/her knowledge there is no relevant audit information
of which the Company’s auditor is unaware.
• He/she has taken all the steps that they ought to have taken
as a Director in order to make themselves aware of any relevant
audit information and to establish that the Company’s auditor
is aware of that information.
This confirmation is given and should be interpreted in accordance
with the provisions of section 418 of the Companies Act 2006.
Deloitte LLP (Deloitte) have confirmed their willingness to continue
in office as auditor of the Company. Following a review by the Audit
Committee of their effectiveness, details of which are set out on page 64,
a resolution to re-appoint Deloitte will be proposed at the AGM.
It is the Company’s general policy that its auditor will not carry out
non-audit services except where it is appropriate to do so and in
accordance with the Company’s formal policy for the carrying out
of such work. In addition, and in line with the Code, the Committee
takes into account the relevant ethical guidance regarding the provision
of non-audit services by the external auditor. The Company notes the
consultation currently under way to consider designating further areas
for which the auditor should not be allowed to provide non-audit
services. Any revision to current regulations or guidelines will be
taken into account in framing the Company’s policy going forward
and reported on in future Annual Reports as appropriate. Deloitte
provided non-audit services to the Group during the year within the
policy framework as described in the Audit Committee Report, details
of which are set out in Note 6 on page 110.
Basis of accounting
As reported in last year’s Annual Report and Accounts, the Company
changed its basis of accounting with effect from 1 January 2015 to
FRS 101. Further details may be found in the Audit Committee Report
on page 66.
Annual General Meeting
The AGM will be held at 11:00 am on 28 April 2016 at The British
Medical Association, BMA House, Tavistock Square, London,
WC1H 9JP.
Formal notice of the AGM including details of the special business
being proposed is set out in the Notice of Meeting on pages 147 to 155
and on the Company’s website www.taylorwimpey.co.uk. In line with
recent practice, voting on all resolutions at this year’s AGM will again
be conducted by way of a poll. The Board believes that this method of
voting gives as many shareholders as possible the opportunity to have
their votes counted as part of the process, whether their votes are
tendered by proxy in advance of or in person at the AGM.
Web communication
With shareholders’ consent, the Company has adopted web
communication. The benefits of web communication are that it:
• Enables the Company to significantly reduce its printing and
postage costs.
• Enables shareholders to access information faster, on the
day documents are published on the Company’s website.
• Reduces the amount of resources consumed, such as paper,
and therefore helps to reduce the impact of printing, mailing and
related activities on the environment.
Shareholder communications (including the 2015 Annual Report and
Accounts) are available electronically through the Company’s website.
The Company will of course continue to provide hard copy
documentation to those shareholders who have requested this
and is, of course, happy to do so.
Registrar
The Company’s registrar is Capita Asset Services. Their details,
together with information on the services and facilities available to
shareholders, are set out in the Shareholder Facilities section on
page 157.
Capital structure
Details of the Company’s issued share capital, together with information
on the movements in the Company’s issued share capital during
the year, are shown in Note 22 on page 128.
86
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Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Statutory, Regulatory and Other Information continued
The Company has two classes of shares: Ordinary Shares of 1p,
each of which carries the right to one vote at general meetings of
the Company and such other rights and obligations as are set out
in the Company’s Articles of Association, and Deferred Shares
which carry no voting rights.
The authority given by shareholders at the AGM held on 23 April 2015
for the Company to purchase a maximum of 325,346,100 of its own
shares remained valid at 31 December 2015. The authority was not
exercised during 2015 or prior to the date of this Report. The Company
has no current intention of exercising this authority but will nevertheless
be seeking the usual renewal of this authority at the AGM and the Board
will continue to keep the position under regular review. The Company
currently holds no shares in treasury.
There are no specific restrictions on the size of a holding, the exercise
of voting rights, nor on the transfer of shares, which are governed by
the Articles of Association and prevailing legislation. The Directors
are not aware of any agreement or agreements between holders of
the Company’s shares that may result in restrictions on the transfer
of securities or on voting rights.
Details of employee share schemes are set out in the Remuneration
Report on pages 72 and 73. The Employee Share Ownership Trust
which hold shares on trust for employees under various share schemes,
generally abstain from voting at shareholder general meetings in respect
of shares held by them.
No person has any special rights of control over the Company’s share
capital and all issued shares are fully paid.
Substantial interests
The persons set out in the table opposite have notified the Company
pursuant to Rule 5.1 of the Disclosure and Transparency Rules
of their interests in the ordinary share capital of the Company.
At 26 February 2016, no change in these holdings had been notified
nor, according to the Register of Members, did any other shareholder
at that date have a disclosable holding of the Company’s issued
share capital.
Directors’ interests, including interests in the Company’s shares,
are shown in the Remuneration Report. The Board strongly believes
in the alignment of interests between senior management and the
Company’s shareholders.
Substantial interests in the Company’s shares
as at 26 February 2016
Name
BlackRock, Inc.
JP Morgan Asset Management Holdings Inc
FMR LLC
Schroder plc & Schroder Investment
Management Limited
The Capital Group Companies, Inc.
Legal & General Group Plc
Standard Life Investments Limited
Number of
shares held
(millions)
Percentage of
issued voting
share capital
181.0
159.6
156.9
152.1
131.3
98.4
96.4
5.55
4.99
4.84
4.71
4.04
3.02
3.02
Dividend
Information relating to the recommended 2015 final dividend is set out
in the Chairman’s Statement on page 10 and in the notes to resolution 2
on page 151 in the Notes to the Notice of Annual General Meeting.
Information relating to the recommended 2016 special dividend is set
out in the Chairman’s Statement on page 10 and in the notes to
resolution 3 on page 151 in the Notes to the Notice of Annual General
Meeting.
The Company will be operating a Dividend Re-Investment Plan (DRIP),
further details of which are set out on page 156 of this Annual Report.
The DRIP will operate automatically in respect of the 2015 final dividend
for those shareholders who have previously registered a DRIP mandate
(unless varied by shareholders beforehand) and also in respect of all
future dividends, including special dividends, until such time as each
participating shareholder elects to withdraw from the DRIP, or the
DRIP is suspended or terminated in accordance with the Terms and
Conditions of the plan. The Board will continue to keep the availability
of the DRIP under regular review.
Shareholders are again reminded to check their position with regard to
any dividend mandates that are in place, should they either wish to
participate in the DRIP or discontinue or vary any participation, as
existing mandates will apply to all dividend payments (including
special dividends) unless or until revoked.
The right to receive any dividend has been waived in part by the Trustee
of the Company’s Employee Share Ownership Trusts (ESOTs) over those
Trusts’ combined holding of 9,000,914 shares. More details of these
ESOTs are contained in Note 25 on page 130.
Research and development
During 2015 the Company continued to build its new standard house
type range in significant numbers. Taylor Wimpey has designed in-house
a new suite of house types that meet the space and accessibility
standards introduced as a result of the housing standards review.
These will be available for use by our regions during 2016.
www.taylorwimpey.co.uk
We continue to work with our supply chain to identify new products
and techniques available to us and appraise them before they will be
needed. As the proposal to further improve energy efficiency through
Part L of the Building Regulations in 2016 has been removed, our focus
for 2015 turned to continual improvement of our specification and
construction details to meet current building regulations in the most
robust way. This will continue in 2016. As an adjunct to our research
and development we continue to contribute to several industry working
groups looking at energy efficiency, changes to building regulations and
standards and how to close the gap between design and performance.
During 2015 we embarked on ‘Project 2020’, a major long
term initiative that could impact upon several aspects of our
future business and processes. As part of Project 2020 we are
exploring and evaluating trends, changes and innovations in design,
architecture, technology, materials and methodology. Our aim is
to shape, design and future-proof as much as practicably possible,
the homes that we build for 2020 and beyond. As part of this process
we are engaging with organisations such as BRE and the Zero
Carbon Hub and also with academics, suppliers, industry and
research bodies. As part of our Research we will also look at and
evaluate developments taking place in Europe, Asia, and America.
Workstreams include product design, demographics, customer
profiling, alternative build methodologies, smart homes technology,
sustainability of raw materials and other initiatives. We are looking
at a range of environmental issues including energy efficiency,
zero-energy buildings, renewable energy technologies, resource
efficiency and carbon reduction.
More information on Project 2020 appears in the Chief Executive’s
Review on page 29.
We are working on a number of additional sustainability initiatives
that relate to green infrastructure. We use a Carbon Futures approach
to quantify the carbon dioxide emissions for entire sites. This approach
takes into account the buildings but also the carbon absorption of green
infrastructure throughout the site. We have undertaken a Carbon Futures
assessment for our Prince Philip Barracks development at Bordon.
We are also a partner in Newcastle University’s SUCCESS (Sustainable
Urban Carbon Capture: Engineering Soils for Climate Change) project.
This project is investigating the performance of soils to act as a carbon
sink and how to maximise sequestration of atmospheric carbon dioxide
through natural soil processes including ‘Carbon Capture Gardens’.
Employee involvement and communication
We are proud of how committed our employees are to Taylor Wimpey
and the long term success of our business. We strive to listen to and
engage with all staff and employees. During 2015, we undertook
the latest annual employee engagement survey “Talkback” and the
feedback from our employees continues to shape our plans and
priorities for the future.
More details of the outcomes of the survey are set out in the Chief
Executive’s Review on page 15.
We believe that inviting and listening to employee feedback is
essential and we will conduct employee surveys on an annual
basis going forward.
We have active employee consultation committees in our regional
business units and communicate with employees via our half yearly
Teamtalk employee magazine and regular Teamtalk Express email
newsletter. Our intranet includes a wide range of employee information
from human resources policies to advice for employees on sustainable
living. It also includes an ‘Open Door’ forum that puts employees
directly in touch with our Chief Executive. During 2015 we introduced
a new customer services forum on our intranet and invited employees
to voice their thoughts, concerns, ideas and initiatives on key customer
questions. Employees could post comments within the forum or send
an email to our Chief Executive or Customer Director.
The Company is committed to ensuring open and regular
communication throughout the Group on both business-related
issues and issues of general interest. There is a formal Employee
Consultative Committee structure in place in all operations and
elected representatives meet with management to consult on
appropriate issues. Intranet systems are continually updated which
provide a valuable communication tool across the Group and an
important facility for providing employees with access to a wide
range of information. Information is regularly cascaded throughout
the Group via email – including regular communications from the
Chief Executive – and via verbal briefings and by management
presentations. The Company’s internal magazine provides
further communication.
88
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Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Statutory, Regulatory and Other Information continued
The Company promotes share ownership as widely as possible
across the business. In addition to the various share-related reward
plans described in the Remuneration Report on pages 68 to 85, the
Company also offers a scheme whereby employees (i.e. generally those
who do not participate in the Executive Incentive Scheme (cash bonus
scheme)) are offered the opportunity each year to exchange part of any
cash bonus awarded for exceptional performance, into shares of the
Company, offering a 20% enhancement to the value if taken entirely in
shares and retained for a period. The scheme has operated since 2012
and in 2015 resulted in 481,160 shares (2014: 724,297) being acquired
by 301 employees (2014: 326).
In addition to the above, the Company also maintains two all-employee
share plans, namely, the Save As You Earn share option plan and the
Share Incentive Plan (SIP), which are offered as widely as possible
across the Group. Over half of our eligible employees participate in one
or both plans or are otherwise already shareholders of the Company.
Equal opportunities
We strive to treat our employees fairly and with respect at all times.
We have policies and processes in place to ensure that we act
in accordance with our cultural values which encompass equal
opportunities, anti-corruption and whistleblowing. We encourage
our employees and subcontractors to speak up about concerns
over any wrongdoing at work and provide access to an independent
reporting hotline service.
We remain committed to the belief that embracing diversity and
inclusion will enable Taylor Wimpey to succeed through a workforce
that is creative and innovative. We continue to actively embrace as
much as possible the business and local communities in which we
operate and will strive to reflect their richness and character, including
such aspects as gender, race and religion but also diversity of thought,
background and experience.
As set out in our Diversity Policy, we remain committed to equality
of opportunity in all of our employment practices, policies and
procedures across the Group. To this end, within the framework
of applicable law, we are committed, wherever practicable, to
achieving and maintaining a workforce which broadly reflects
that of the local catchment area within which we operate.
No employee or potential employee will receive less favourable
treatment due to their race, creed, colour, nationality, ethnic
origin, religion, political or other opinion, affiliation, gender, sexual
orientation, marital status, family connections, age, membership
or non-membership of a trade union, or disability, unless justifiable
in exceptional circumstances, for example due to health and safety
considerations particularly on construction sites. Instruction on equal
opportunities is part of the induction programme and diversity is also
promoted through awareness training locally and by its inclusion as
a business priority at presentations around the business.
Our Diversity Policy can be found on the Company’s
website: www.taylorwimpey.co.uk/corporate/sustainability/our-policies
Employment of people with disabilities
It is our policy that people with disabilities should have fair
consideration for all vacancies within the Group.
The Company is therefore committed, where possible, to ensuring
that people with disabilities are supported and encouraged to apply
for employment and to achieve progress once employed. They
will be treated so as to ensure that they have an equal opportunity
to be selected, trained and promoted. In addition, every reasonable
effort is made for disabled persons to be retained in the employment
of the Group by investigating the possibility of making reasonable
adjustments to the job, workplace or equipment.
We have increased the number of employees with disabilities recruited.
Working with key partners, we hope to increase more permanent and
secondment opportunities for people with disabilities;
For example, we have recently engaged with the Leonard Cheshire
Disability Change 100 Programme, a charity that provides talented
disabled students with the opportunity to participate in a 100 day
summer internship and professional development programme.
Feedback from the students who participated in the programme
in 2015 has been very positive and we intend to engage with the
programme further during 2016.
Charitable donations
The Company has a Charity Committee, which operates within
written terms of reference and charitable guidelines. The Committee’s
aims are to monitor and review charitable donations made by regional
businesses as against the guidelines and to assess and administer larger
donations centrally. The Committee is chaired by the Chief Executive
and includes representatives from all areas and levels of the Group’s UK
businesses, from the Board to apprentices and trainees. The Company
and the Committee encourage non-financial contributions also and for
employees to participate in charitable causes.
During the year, Group companies donated £559,424 (2014: £272,790)
to various charities in the UK. In addition, many employees at all levels
around the country gave up their work and free time to participate
in fundraising events for charitable causes including Centrepoint;
The Youth Adventure Trust; and Crisis UK.
Further information on the Group’s donations, activities and initiatives
can be found in Our Business Model on page 32 and in the Sustainability
Report 2015 which will shortly be available on the Company’s website:
www.taylorwimpey.co.uk/corporate/sustainability
Political donations
The Company has a policy of not making donations to political parties,
and has not made any this year and neither does it intend to make
any going forward. The Company does support certain industry-wide
organisations which directly assist the housebuilding industry such as
the Home Builders Federation and the Confederation of British Industry.
Whilst we do not regard this support as political in nature in any way,
the Companies Act 2006 definition of ‘political organisations’ and
related terms is very wide and in certain circumstances a donation or
a subscription to such organisations or to a charity could retrospectively
be categorised as a political donation in the eyes of the law. Accordingly,
as a matter of prudency, the Company will be seeking the usual annual
dispensation from its shareholders at the 2016 AGM so as to be
able to continue with the above memberships and make charitable
donations up to defined levels without inadvertently breaching
the applicable legislation.
www.taylorwimpey.co.uk
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company’s transactions and
disclose with reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors are responsible for the maintenance and integrity of
the corporate and financial information included on the Company’s
website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation
in other jurisdictions.
In accordance with Provision C.1 of the Code, the Directors are required,
inter alia, to ensure that the Annual Report and Accounts provides the
information necessary for shareholders to assess the Company’s
performance, business model and strategy. Details of how this was
addressed are set out in the Audit Committee Report on page 67.
Responsibility statement
The Directors confirm that to the best of their knowledge:
• The financial statements, prepared in accordance with the relevant
financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and
the undertakings included in the consolidation taken as a whole.
• The Strategic Report includes a fair review of the development
and performance of the business and the position of the Company
and the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and uncertainties
that they face.
• The Annual Report and Accounts, taken as a whole, are fair, balanced
and understandable and provide the information necessary for
shareholders to assess the Company’s performance, business
model and strategy.
This Report of the Directors was approved by the Board of Directors
on 29 February 2016.
James Jordan
Group Legal Director and Company Secretary
Taylor Wimpey plc
29 February 2016
Agreements
Apart from a small number of borrowing agreements, pursuant to
which the Company borrows or is able to borrow money, which could
potentially be terminated by the other party upon a change of control
of the Company, there are no significant contracts or agreements which
take effect, alter or terminate upon a change of control of the Company.
Important events since the year end
There have been no important events affecting the Company or any
of its subsidiary undertakings since 31 December 2015.
Directors’ responsibilities statement
The Directors are responsible for preparing the Annual Report and
Accounts in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for
each financial year. Accordingly, Directors are required to prepare the
Group financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union and
Article 4 of the IAS Regulation and have elected to prepare the Parent
Company financial statements in accordance with FRS 101 (United
Kingdom Accounting Standards and applicable law) as adopted from
1 January 2015 and reported in last year’s Annual Report and Accounts.
In accordance with company law, the Directors must not approve the
accounts unless they are satisfied that they give a true and fair view
of the state of affairs of the Company and of the profit or loss of the
Company for that period.
In preparing the Parent Company financial statements, the Directors
are required to:
• Select suitable accounting policies and then apply them consistently.
• Make judgements and accounting estimates that are reasonable
and prudent.
• State whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements.
• Prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Company will continue
in business.
In preparing the Group financial statements, International Accounting
Standard 1 requires that Directors:
• Properly select and apply accounting policies.
• Present information, including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable
information.
• Provide additional disclosures when compliance with the specific
requirements in IFRSs are insufficient to enable users to understand
the impact of particular transactions, other events and conditions
on the entity’s financial position and financial performance.
• Make an assessment of the Company’s ability to continue
as a going concern.
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Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 98
Financial Statements
94
Independent Auditor’s
Report
Consolidated Income
Statement
Consolidated Statement of
Comprehensive Income
100 Consolidated Balance Sheet
101 Consolidated Statement of
99
Changes in Equity
102 Consolidated Cash Flow
Statement
103 Notes to the Consolidated
Financial Statements
135 Company Balance Sheet
136 Company Statement of
Changes in Equity
137 Notes to the Company
Financial Statements
142 Particulars of Subsidiaries,
Associates and Joint
Ventures
146 Five Year Review
92
93
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Independent Auditor’s Report
Opinion on financial statements of Taylor Wimpey plc
In our opinion:
• the financial statements give a true and fair view of the state of the
Group’s and of the Parent Company’s affairs as at 31 December
2015 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in
accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union;
• the Parent Company financial statements have been properly prepared
in accordance with United Kingdom Generally Accepted Accounting
Practice, including FRS 101 ‘Reduced Disclosure Framework’; and
• the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006 and, as regards the Group
financial statements, Article 4 of the IAS Regulation.
The financial statements comprise the Consolidated Income Statement,
the Consolidated Statement of Comprehensive Income, the Consolidated
and Parent Company Balance Sheets, the Consolidated and Parent
Company Statement of Changes in Equity, the Consolidated Cash
Flow Statement and the Notes 1 to 31 relating to the Consolidated
financial statements and 1 to 15 relating to the Parent Company financial
statements. The financial reporting framework that has been applied in
the preparation of the Group Financial Statements is applicable law and
IFRS as adopted by the European Union. The financial reporting
framework that has been applied in the preparation of the Parent
Company Financial Statements is applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted Accounting
Practice), including FRS 101 ‘Reduced Disclosure Framework’.
Going concern and the Directors’ assessment of
the principal risks that would threaten the solvency
or liquidity of the Group
As required by the Listing Rules we have reviewed the Directors’
statement regarding the appropriateness of the going concern basis
of accounting contained within Note 1 to the financial statements and
the Directors’ statement on the longer term viability of the Group
contained within the Risk Section on page 35.
We have nothing material to add or draw attention to in relation to:
• the Directors’ confirmation on pages 35 and 66 that they have
carried out a robust assessment of the principal risks facing the
Group, including those that would threaten its business model,
future performance, solvency or liquidity;
• the disclosures on pages 34 to 37 that describe those risks and explain
how they are being managed or mitigated;
• the Directors’ statement in Note 1 to the financial statements about
whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them and their identification of any
material uncertainties to the Group’s ability to continue to do so over
a period of at least twelve months from the date of approval of the
financial statements;
• the Directors’ explanation on page 35 as to how they have assessed
the prospects of the Group, over what period they have done so and
why they consider that period to be appropriate, and their statement as
to whether they have a reasonable expectation that the Group will be
able to continue in operation and meet its liabilities as they fall due over
the period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
We agreed with the Directors’ adoption of the going concern basis
of accounting and we did not identify any such material uncertainties.
However, because not all future events or conditions can be predicted,
this statement is not a guarantee as to the Group’s ability to continue
as a going concern.
Independence
We are required to comply with the Financial Reporting Council’s Ethical
Standards for Auditors and we confirm that we are independent of the
Group and we have fulfilled our other ethical responsibilities in accordance
with those standards. We also confirm we have not provided any of the
prohibited non-audit services referred to in those standards.
Our assessment of risks of material misstatement
The assessed risks of material misstatement described below are
those that had the greatest effect on our audit strategy, the allocation
of resources in the audit and directing the efforts of the engagement
team. These risks remain consistent with the prior period.
As part of our audit of the Group, in addition to substantive tests, we also
evaluate the design and implementation of internal controls over financial
reporting in each of the risk areas.
Risk
Inventory Costing
Refer to page 67 (Audit Committee Report) page 107 (Critical
Accounting judgements and key sources of estimation uncertainty)
and page 117 (financial statement disclosures).
How the scope of our audit responded to the risk
We tested a sample of sites as part of our visits to the Group’s Business
Units. We determined whether shared costs were allocated across sites,
phases and plots appropriately by assessing the reasonableness of the
methodology used and we independently recalculated a sample.
The value for inventory as at 31 December 2015 is £3,891.2 million
(2014: £3,490.1 million) and as such is the most significant value on
the Balance Sheet (page 100).
We consider the appropriate recognition of costs into inventory to be
an area of significant risk.
There is significant judgement in;
• identifying which costs, based on their nature, should be capitalised
into inventory rather than expensed; and
• appropriately allocating these costs across sites, phases and plots –
particularly shared costs such as infrastructure.
We tested the operating effectiveness of controls in relation to;
• the approval of site budgets;
• the regular review meetings where Management review actual costs
against detailed site budgets; and
• the movement of costs across different phases and sites as a result
of these meetings or other factors identified during the construction
of the site.
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
Our assessment of risks of material misstatement continued
Risk
Inventory Costing continued
These judgements impact the carrying value of inventory in the balance
sheet and the profit recognised on each plot sold.
Net realisable value of inventory
Refer to page 67 (Audit Committee report), page 107 (Critical
Accounting judgements and key sources of estimation uncertainty)
and page 117 (financial statement disclosures).
At the balance sheet date the Group held inventory that had been written
down to net realisable value of £139.5 million (2014: £296.6 million) with
associated impairments of £167.7 million (2014: £206.2 million). During
the year the Group recorded a net exceptional expense of £0.6 million
(2014: net release of £18.7 million) as the inventory provision was
increased, on a net basis, due to developments in the year relating
to specific sites. The net increase in the inventory provision has been
recognised as an exceptional item.
The carrying value of inventory at the lower of cost and net realisable
value (NRV) is dependent on key judgements and estimates that are
made by Management. These include:
• an estimation of expected sales prices, which are based on recent
sales prices achieved;
• an estimation of costs to complete;
• the outcome of applications for planning consent; and
• the consideration of other site-specific factors.
Changes to these assumptions could result in a material change in the
carrying value of inventory and the associated movements recorded in
the income statement.
Defined benefit pension scheme accounting
Refer to page 67 (Audit Committee report), page 107 (Critical
Accounting judgements and key sources of estimation uncertainty)
and page 123 (financial statement disclosures).
The total value of the defined benefit pension scheme at the balance
sheet date is a liability of £177.1 million (2014: £182.4 million) and
the liabilities specifically are valued at £2,066.2 million (2014:
£2,186.2 million).
Accounting for a defined benefit pension scheme and the value
of liabilities is dependent on significant assumptions, including an
assessment of the discount rate, price inflation and key demographic
figures including life expectancy and mortality rates. A change in any
of these assumptions could cause a material change in the value of
the liabilities overall and the net pension position on the Group’s
balance sheet.
How the scope of our audit responded to the risk
For a sample of individual plots, we tested additions to the inventory
balance to determine whether the costs have been appropriately
capitalised, by tracing these additions to supporting invoices. We also
tested a sample of journals adding to the inventory balance using IT
interrogation techniques, to highlight any costs that should have been
expensed. In addition, for a sample of sites we obtained details of the
margin that had been recognised and corroborated whether the amount
recognised in the current period took into account all cost elements,
including those that the Group is obligated to in the future as part
of the conditions of planning.
The Company conducted a detailed exercise in assessing the carrying
value of inventory. This exercise is undertaken by each Business Unit
and then subject to review and challenge by Head Office Management.
We tested the inventory NRV model and critically assessed the
judgements that had been made. This included:
• checking the arithmetic accuracy of the calculations within the model
and identifying any anomalies;
• performing a sensitivity analysis on the key judgements relating to the
future expected sales price and costs to complete;
• assessing the estimated sales prices used by Management by testing
the historical sales prices that have been achieved;
• testing a sample of inputs into the Management prepared model
by reference to internal site specific information such as the costs
incurred to date and the estimation of costs required to complete
the sites;
• obtaining evidence to support the current status of a sample of sites,
including agreeing to planning consent and assessing whether the
site specific developments are reflected in the valuation;
• for sites where the value has been written back we have obtained
the specific calculation prepared by Management, corroborated the
specific developments at the site that have led to the write-back and
recalculated the value that should have been recorded as income; and
• we engage with internal specialists who are quantity surveyors
to assess the costs to complete of a sample of sites within the
Management prepared model and whether, based on this specialist,
the assumptions used by Management are reasonable.
We have considered the adequacy of the Group’s disclosures
regarding the carrying value of land, work in progress and the
write-back to inventory.
We assessed the competence and objectivity of the qualified actuary
engaged by the Group to value the scheme’s defined benefits pension
position under IAS 19 ‘Employee benefits’.
We engaged our internal actuarial specialists to assess the
appropriateness of the methodology and assumptions used to account
for the defined benefit scheme. This included comparison of key data
with market benchmarks and to challenge the methodology used by the
scheme actuary. We considered whether each of the key assumptions
was reasonable in isolation and collectively in determining the pension
liability at the balance sheet date.
These accounting judgements are inherently complex; requiring a high
level of Management judgement and specialist actuarial input.
94
94
95
95
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Independent Auditor’s Report continued
Our assessment of risks of material misstatement continued
Risk
Revenue recognition
Refer to page 67 (Audit Committee report), page 107 (Critical
Accounting judgements and key sources of estimation uncertainty)
and page 108 (financial statement disclosures).
We consider there to be a risk in the revenue accounted for
under IAS 11 ‘Construction contracts’ which primarily relates to
the accounting for affordable housing. This revenue stream is an
area of increased judgement.
Key Management judgements include:
• estimating the expected costs to complete each site;
• the future profitability of the site; and
• the percentage of completion at the balance sheet date.
Changes in these judgments can lead to a material change in the value
of revenue recognised.
How the scope of our audit responded to the risk
We conducted testing in relation to the revenue recognised under IAS 11
‘Construction contracts’. This testing involved both tests of detail and
analytical procedures.
In performing our tests of detail the following procedures
were performed:
• we assessed the judgements in relation to the future profitability of
the site with reference to the site budget; and
• we recalculated the value that should be recognised at the balance
sheet date. This was based on the percentage of completion and
was determined with reference to a sample of costs agreed to
works certification and the total sales value as agreed to contracts.
At the analytical level we developed an expectation of the income
that should be recognised in the year from this revenue stream,
with reference to the level of completion.
We assessed the competence and objectivity of the qualified surveyors
employed by the Group and the use of these experts to estimate the
level of completion.
We visited a sample of sites in order to verify how surveyors measure the
degree of build completion of the developments.
We have considered the adequacy of the Group’s disclosures regarding
this revenue stream and whether they are in accordance with IAS 11
‘Construction contracts’.
The description of the risks above should be read in conjunction with the significant issues considered by the Audit Committee discussed on page 67.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Our application of materiality
We define materiality as the magnitude of misstatement in the financial
statements that make it probable that the economic decisions of a
reasonably knowledgeable person would be changed or influenced.
We use materiality both in planning the scope of our audit work and
in evaluating the results of our work.
We determined materiality for the Group to be £29.0 million (2014: £22.5
million), which is calculated based on 5% (2014: 5%) of pre-tax profit for
the year, excluding exceptional items, of £603.8 million (2014: £450.1
million) as described on page 98. The increase in materiality is directly
attributable to the increased underlying pre-tax profit for the Group. Pre-
tax profit, excluding exceptional items, has been chosen for the basis for
materiality as this is the measure by which stakeholders and the market
assess the wider performance of the entity. The exceptional expense is
excluded as this does not represent part of the underlying trading
performance of the business.
We use performance materiality to detect misstatements at a lower
level of precision; for the current year this is set at £20.30 million (2014:
£15.75 million). This is lower than materiality and is used to determine
the size of the samples that are selected for audit work and in forming
the conclusions that we make during the course of our procedures.
We agreed with the Audit Committee that we would report to the
Committee all audit differences in excess of £0.58 million (2014: £0.45
million), as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds. We also report to the Audit
Committee on disclosure matters that we identified when assessing the
overall presentation of the financial statements.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of
the Group and its environment, including Group-wide controls, and
assessing the risks of material misstatements at the Group level. Based
on that assessment, we focused our Group audit scope primarily on
the UK Housing division (excluding joint ventures) which represents the
principal segment within the Group and accounts for 98% (2014: 98%)
of the Group’s net operating assets, 98% (2014: 99%) of the Group’s
revenue and 98% (2014: 99%) of the Group’s pre-tax profit before
exceptional expense.
We audit all of the Group’s UK subsidiaries, which are subject to audit
at a statutory materiality level, which in most cases is substantially lower
than Group materiality. This is performed subsequent to the audit of
the Group accounts.
For the Spanish operations, component auditors report to us on the risk
in relation to the net realisable value of the inventory located in Spain. This
was based on our assessment of the risks of material misstatement and
of the materiality of the Group’s operations within Spain.
For joint ventures, specified audit procedures are conducted by the UK
team. This is based on our assessment of risk within these entities.
At the parent entity level we also tested the consolidation process and
carried out analytical procedures to confirm our conclusion that there
were no significant risks of material misstatement of the aggregated
financial information of the remaining components not subject to
audit or audit of specified account balances.
The audit is performed centrally and includes all of the 24 regional
business units within the Group’s UK Housing division. We choose to
visit a sample of these business units selected on a rotational basis and
with reference to size and complexity among other factors. The purpose
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
In particular, we are required to consider whether we have identified any
inconsistencies between our knowledge acquired during the audit and the
Directors’ statement that they consider the Annual Report is fair, balanced
and understandable and whether the Annual Report appropriately
discloses those matters that we communicated to the Audit Committee
which we consider should have been disclosed. We confirm that we
have not identified any such inconsistencies or misleading statements.
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement, the
Directors are responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on Auditing
(UK and Ireland). We also comply with International Standard on Quality
Control 1 (UK and Ireland). Our audit methodology and tools aim to
ensure that our quality control procedures are effective, understood
and applied. Our quality controls and systems include our dedicated
professional standards review team and independent partner reviews.
This report is made solely to the Company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members as a body, for
our audit work, for this report, or for the opinions we have formed.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures
in the financial statements sufficient to give reasonable assurance that
the financial statements are free from material misstatement, whether
caused by fraud or error. This includes an assessment of: whether the
accounting policies are appropriate to the Group’s and the Parent
Company’s circumstances and have been consistently applied and
adequately disclosed; the reasonableness of significant accounting
estimates made by the Directors; and the overall presentation of the
financial statements. In addition, we read all the financial and non-financial
information in the Annual Report to identify material inconsistencies with
the audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with,
the knowledge acquired by us in the course of performing the audit. If we
become aware of any apparent material misstatements or inconsistencies
we consider the implications for our report.
Edward Hanson, FCA (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
29 February 2016
of these visits is to conduct procedures over selected controls that are
in place at each Business Unit and also to perform substantive testing of
certain balances. In the current year we performed regional visits to
five locations (2014: four).
In addition we also visit other Business Units throughout the entity which
are chosen on a random basis and where we perform substantive
testing. This was performed at four locations (2014: five).
Opinion on other matters prescribed by the Companies
Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the part of the Directors’ Remuneration Report to be audited
has been properly prepared in accordance with the Companies
Act 2006;
• the information given in the Strategic Report and the Directors’ Report
for the financial year for which the financial statements are prepared is
consistent with the financial statements; and
• the Strategic Report and the Directors’ Report have been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Company and
its environment obtained in the course of the audit, we have not
identified any material misstatements in the Strategic Report and
the Directors’ Report.
Matters on which we are required to report by exception
Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if,
in our opinion:
• we have not received all the information and explanations we require
for our audit; or
• adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with
the accounting records and returns.
We have nothing to report in respect of these matters.
Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our
opinion certain disclosures of Directors’ remuneration have not been
made or the part of the Directors’ Remuneration Report to be audited
is not in agreement with the accounting records and returns. We have
nothing to report arising from these matters.
Corporate Governance Statement
Under the Listing Rules we are also required to review the part of the
Corporate Governance Statement relating to the Company’s compliance
with certain provisions of the UK Corporate Governance Code. We have
nothing to report arising from our review.
Our duty to read other information in the Annual Report
Under International Standards on Auditing (UK and Ireland), we are
required to report to you if, in our opinion, information in the Annual
Report is:
• materially inconsistent with the information in the audited financial
statements; or
• apparently materially incorrect based on, or materially inconsistent
with, our knowledge of the Group acquired in the course of
performing our audit; or
• otherwise misleading.
96
96
97
97
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Consolidated Income Statement
for the year to 31 December 2015
£ million
Continuing operations
Revenue
Cost of sales
Gross profit before positive contribution
Positive contribution from written down inventory
Gross profit
Net operating expenses
Profit on ordinary activities before finance costs
Interest receivable
Finance costs
Share of results of joint ventures
Profit on ordinary activities before taxation
Taxation (charge) / credit
Profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Basic earnings per share
Diluted earnings per share
Adjusted basic earnings per share
Adjusted diluted earnings per share
Note
4
6
8
8
13
9
Note
10
10
10
10
Before
exceptional
items
2015
Exceptional
items
2015
(Note 6,
9 and 15)
Before
exceptional
items
2014
Exceptional
items 2014
(Note 6
and 15)
Total
2015
3,139.8
(2,351.8)
779.1
8.9
788.0
(155.9)
632.1
0.7
(33.9)
4.9
603.8
(121.5)
482.3
–
(0.6)
(0.6)
–
(0.6)
–
(0.6)
–
–
–
(0.6)
8.1
7.5
2,686.1
(2,065.2)
605.0
15.9
620.9
(142.8)
478.1
0.6
(31.2)
2.6
450.1
(90.4)
359.7
–
18.7
18.7
–
18.7
–
18.7
–
–
–
18.7
(4.0)
14.7
3,139.8
(2,352.4)
778.5
8.9
787.4
(155.9)
631.5
0.7
(33.9)
4.9
603.2
(113.4)
489.8
490.1
(0.3)
489.8
2015
15.1p
14.9p
14.9p
14.7p
Total
2014
2,686.1
(2,046.5)
623.7
15.9
639.6
(142.8)
496.8
0.6
(31.2)
2.6
468.8
(94.4)
374.4
374.4
–
374.4
2014
11.6p
11.5p
11.2p
11.1p
Consolidated Statement of Comprehensive Income
for the year to 31 December 2015
£ million
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Movement in fair value of hedging derivatives and loans
Items that will not be reclassified subsequently to profit or loss:
Actuarial loss on defined benefit pension schemes
Tax (charge)/ credit on items taken directly to other comprehensive income
Other comprehensive expense for the year net of tax
Profit for the year
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
Note
2015
2014
24
24
20
14
(1.5)
1.5
(8.6)
(0.7)
(9.3)
489.8
480.5
480.8
(0.3)
480.5
(1.8)
1.8
(25.9)
5.2
(20.7)
374.4
353.7
353.7
–
353.7
98
98
99
99
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Consolidated Balance Sheet
at 31 December 2015
Consolidated Statement of Changes in Equity
for the year to 31 December 2015
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
£ million
Non-current assets
Intangible assets
Property, plant and equipment
Interests in joint ventures
Trade and other receivables
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Tax receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Tax payables
Provisions
Net current assets
Non-current liabilities
Trade and other payables
Bank and other loans
Retirement benefit obligations
Provisions
Total liabilities
Net assets
Equity
Share capital
Share premium account
Own shares
Other reserves
Retained earnings
Equity attributable to parent
Non-controlling interests
Total equity
Note
2015
2014
11
12
13
16
14
15
16
16
18
21
18
17
20
21
22
23
25
24
24
2.7
20.0
27.1
95.4
55.7
200.9
3,891.2
114.0
1.7
323.3
4,330.2
4,531.1
(1,093.4)
–
(31.1)
(1,124.5)
3,205.7
(402.0)
(100.0)
(178.4)
(2.9)
(683.3)
(1,807.8)
2.5
16.8
38.6
111.1
157.5
326.5
3,490.1
102.6
7.8
212.8
3,813.3
4,139.8
(910.0)
(7.8)
(40.4)
(958.2)
2,855.1
(361.5)
(100.0)
(183.8)
(1.0)
(646.3)
(1,604.5)
2,723.3
2,535.3
288.3
762.9
(3.2)
41.9
1,632.7
2,722.6
0.7
2,723.3
288.3
762.9
(10.8)
41.9
1,451.9
2,534.2
1.1
2,535.3
The financial statements of Taylor Wimpey plc (registered number: 296805) were approved by the Board of Directors and authorised for issue on
29 February 2016. They were signed on its behalf by:
P Redfern
Director
R Mangold
Director
100
100
For the year to 31 December 2015
£ million
Balance as at 1 January 2015
Exchange differences on translation of foreign operations
Movement in fair value of hedging derivatives and loans
Actuarial loss on defined benefit pension schemes
Deferred tax charge
Other comprehensive expense for the year net of tax
Profit for the year
Total comprehensive income for the year
New share capital subscribed
Own shares acquired
Utilisation of own shares
Cash cost of satisfying share options
Share-based payment credit
Tax credit on items taken directly to statement of changes in equity
Dividends approved and paid
Equity attributable to parent
Non-controlling interests
Total equity
For the year to 31 December 2014
£ million
Balance as at 1 January 2014
Exchange differences on translation of foreign operations
Movement in fair value of hedging derivatives and loans
Actuarial loss on defined benefit pension schemes
Deferred tax credit
Other comprehensive income for the year net of tax
Profit for the year
Total comprehensive income for the year
New share capital subscribed
Own shares acquired
Utilisation of own shares
Cash cost of satisfying share options
Share-based payment credit
Transfer to retained earnings
Dividends approved and paid
Equity attributable to parent
Non-controlling interests
Total equity
Share
capital
288.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
288.3
Share
capital
288.1
–
–
–
–
–
–
–
0.2
–
–
–
–
–
–
288.3
Share
premium
762.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
762.9
Share
premium
760.2
–
–
–
–
–
–
–
2.7
–
–
–
–
–
–
762.9
Own
shares
(10.8)
–
–
–
–
–
–
–
–
(2.0)
9.6
–
–
–
–
(3.2)
Own
shares
(18.9)
–
–
–
–
–
–
–
–
(10.0)
18.1
–
–
–
–
(10.8)
Other
reserves
41.9
(1.5)
1.5
–
–
–
–
–
–
–
–
–
–
–
–
41.9
Other
reserves
43.8
(1.8)
1.8
–
–
–
–
–
–
–
–
–
–
(1.9)
–
41.9
Retained
earnings
1,451.9
–
–
(8.6)
(0.7)
(9.3)
490.1
480.8
–
–
–
(7.2)
7.3
8.3
(308.4)
1,632.7
Retained
earnings
1,177.5
–
–
(25.9)
5.2
(20.7)
374.4
353.7
–
–
–
(14.7)
6.2
1.9
(72.7)
1,451.9
Total
2,534.2
(1.5)
1.5
(8.6)
(0.7)
(9.3)
490.1
480.8
–
(2.0)
9.6
(7.2)
7.3
8.3
(308.4)
2,722.6
0.7
2,723.3
Total
2,250.7
(1.8)
1.8
(25.9)
5.2
(20.7)
374.4
353.7
2.9
(10.0)
18.1
(14.7)
6.2
–
(72.7)
2,534.2
1.1
2,535.3
101
101
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Consolidated Cash Flow Statement
for the year to 31 December 2015
£ million
Net cash from operating activities
Investing activities
Interest received
Dividends received from joint ventures
Proceeds on disposal of property, plant and equipment
Purchases of property, plant and equipment
Purchases of software
Amounts repaid by/(invested in) joint ventures
Net cash generated from/(used in) investing activities
Financing activities
Proceeds from sale of own shares
Cash received on exercise of share options
Purchase of own shares
Dividends paid
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
Cash and cash equivalents at end of year
Note
26
2015
406.9
2014
192.7
0.6
0.8
0.7
(5.6)
(1.5)
15.6
10.6
–
2.4
(2.0)
(308.4)
(308.0)
109.5
212.8
1.0
323.3
12
11
26
0.4
2.5
0.4
(9.7)
–
(3.8)
(10.2)
2.9
3.4
(10.0)
(72.7)
(76.4)
106.1
105.4
1.3
212.8
Notes to the Consolidated Financial Statements
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
1. Significant accounting policies
Basis of preparation
The consolidated financial statements have been prepared on a going
concern basis and under the historical cost convention except as
otherwise stated below.
The principal accounting policies adopted, which have been applied
consistently, except as otherwise stated, are set out below.
Going concern
The Group has prepared forecasts, including certain sensitivities taking
into account the principal risks identified on pages 34 to 37. Having
considered these forecasts, the Directors remain of the view that the
Group’s financing arrangements and capital structure provide both
the necessary facilities and covenant headroom to enable the Group
to conduct its business for at least the next 12 months.
Accordingly, the consolidated financial statements have been prepared
on a going concern basis.
Basis of accounting
The consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS). The financial
statements have also been prepared in accordance with IFRS as
endorsed by the European Union and therefore the Group financial
statements comply with Article 4 of the EU IAS Regulation.
Basis of consolidation
The consolidated financial statements incorporate the financial statements
of the Company and entities controlled by the Company (its subsidiaries)
made up to 31 December each year. Control is achieved where the
Company has the power to direct the relevant activities of an investee
entity and obtain variable returns from its activities. The existence
and effect of potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Group
controls another entity.
On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair value at the date of acquisition.
Any excess of the cost of acquisition over the fair value of the identifiable
net assets acquired is recognised as goodwill. Any deficiency of the cost
of acquisition below the fair value of the identifiable net assets acquired
(i.e. discount on acquisition) is credited to the income statement in the
period of acquisition. The interest of non-controlling shareholders is stated
at the non-controlling interest’s proportion of the fair value of the assets
and liabilities recognised. Subsequently, all comprehensive income is
attributed to the owners and the non-controlling interests, which may
result in the non-controlling interest having a debit balance.
The results of subsidiaries acquired or disposed of during the year are
included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate. Where
a subsidiary is disposed of which constituted a major line of business, it is
disclosed as a discontinued operation. Where necessary, adjustments are
made to the financial statements of subsidiaries to bring the accounting
policies used into line with those used by the Group. All intra-Group
transactions, balances, income and expenses are eliminated
on consolidation.
Joint ventures
Undertakings are deemed to be a joint venture when the Group has
joint control of the rights and assets of the undertaking via either voting
rights or a formal agreement which includes that unanimous consent is
required for strategic, financial and operating decisions. Joint ventures
are consolidated under the equity accounting method. On transfer of
land and/or work in progress to joint ventures, the Group recognises
only its share of any profits or losses.
Joint operations arise where the Group has joint control of an operation,
but has rights to only its own assets and obligations related to the
operation. These assets and obligations, and the Group’s share
of revenues and costs, are included in the Group’s results.
Segmental reporting
The Group operates in two countries, being the United Kingdom and
Spain, both of which were previously reported as operating segments.
During 2015, following a review of the operational structure of the
business, the previous South Division of the UK Housing business was
separated into the Central and South West Division, and the London and
South East Division, while the North Division remained unchanged. The
Chairmen of the two new Divisions joined the Group Management Team
alongside the Chairman of the North Division as well as the Managing
Director of the Central London regional business (which sits within the
London and South East Division), who also has responsibility for the
Group’s integrated London strategy. The information on segment
performance presented to the Group’s chief operating decision
maker was also revised to reflect the new operating structure.
In response to these changes management has updated its identification
of the Group’s operating segments, determining that in the United
Kingdom, for management reporting and control purposes, there are now
four geographical operating segments, as well as an additional operating
segment covering the corporate functions, Major Developments and
Strategic Land. However management has determined that it is
appropriate for the London and South East Division and the Central
London regional business to be aggregated as one operating segment
due to the fact that they share similar economic characteristics. In making
this judgement management has taken into consideration the fact that the
Group’s developments within the Greater London area are undertaken by
several regional businesses within the London and South East Division as
well as the Central London regional business and as such the Group’s
exposure to the London market extends beyond the Central London
regional business. Management has also assessed that both segments
have similar long term financial performance, as demonstrated by similar
average gross margins and similar production processes, types of
customers, sales channels and regulatory environments.
As such the segmental reporting for 2015 (with the prior year restated) is:
• Housing United Kingdom:
– North
– Central and South West
– London and South East (including Central London)
– Corporate
• Housing Spain
Revenue
Revenue comprises the fair value of the consideration received or
receivable, net of value added tax, rebates and discounts and after
eliminating sales within the Group. Revenue and profit are recognised
as follows:
(a) Private housing development properties and land sales
Revenue is recognised in the income statement when the significant
risks and rewards of ownership have been transferred to the purchaser.
Revenue in respect of the sale of residential properties is recognised
at the fair value of the consideration received or receivable on
legal completion.
102
102
103
103
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
1. Significant accounting policies continued
(b) Part exchange
In certain instances, property may be accepted in part consideration for a
sale of a residential property. The fair value is established by independent
surveyors, reduced for cost to sell. Net proceeds generated from the
subsequent sale of part exchange properties are recorded as a reduction
to cost of sales. The original sale is recorded in the normal way, with
the fair value of the exchanged property replacing cash receipts.
(c) Cash incentives
Cash incentives are considered to be a discount from the purchase
price offered to the acquirer and are therefore accounted for as a
reduction to revenue.
(d) Contracting work and social housing contracts
Where the outcome of a long term contract can be estimated reliably,
revenue and costs are recognised by reference to the stage of completion
of the contract activity at the balance sheet date. This is normally
measured by surveys of work performed to date. Variations in contract
work, claims and incentive payments are included to the extent that it is
probable that they will result in revenue and they are capable of being
reliably measured.
Where the outcome of a long term contract cannot be estimated reliably,
contract revenue is recognised to the extent of contract costs incurred
that it is probable will be recoverable. Contract costs are recognised as
expenses in the period in which they are incurred. When it is probable that
total contract costs will exceed total contract revenue, the expected loss
is recognised as an expense immediately.
Cost of sales
The Group determines the value of inventory charged to cost of sales
based on the total budgeted cost of developing a site. Once the total
expected costs of development are established they are allocated to
individual plots to achieve a standard build cost per plot.
To the extent that additional costs or savings are identified as the site
progresses, these are recognised over the remaining plots unless they
are specific to a particular plot, in which case they are recognised in
the income statement at the point of sale.
Positive contribution
The positive contribution presented on the face of the income statement
represents the net amount of previous impairments allocated to inventory
on a plot that has subsequently resulted in a gross profit on completion.
This is due to the combination of selling prices and costs, or product
mix improvements exceeding our market assumptions in the previous
net realisable value (NRV) exercise. These amounts are stated before
the allocation of overheads which are excluded from the Group’s
NRV exercise.
Exceptional items
Exceptional items are defined as items of income or expenditure which,
in the opinion of the Directors, are material and unusual in nature or of
such significance that they require separate disclosure on the face of
the income statement in accordance with IAS 1 ‘Presentation of
Financial Statements’.
Interest receivable
Interest income on bank deposits is recognised on an accruals basis.
Also included in interest receivable are interest and interest-related
payments the Group receives on other receivables.
Borrowing costs
Borrowing costs are recognised on an accruals basis and are payable
on the Group’s borrowings. Also included in borrowing costs is the
amortisation of fees associated with the arrangement of the financing.
Finance charges, including premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accruals
basis in the income statement using the effective interest method and
are added to the carrying amount of the instrument to the extent that
they are not settled in the period in which they arise.
Capitalised finance costs are held in other receivables and amortised over
the period of the facility.
Foreign currencies
The individual financial statements of each Group company are
presented in the currency of the primary economic environment in which
it operates (its functional currency). Transactions in currencies other than
the functional currency are recorded at the rates of exchange prevailing
on the dates of the transactions. At each balance sheet date, monetary
assets and liabilities that are denominated in foreign currencies other
than the functional currency are retranslated at the rates prevailing
at the balance sheet date.
Non-monetary assets and liabilities carried at fair value that are
denominated in foreign currencies are translated at the rates prevailing
at the date when the fair value was determined. Gains and losses arising
on retranslation are included in the net profit or loss for the period.
On consolidation, the assets and liabilities of the Group’s overseas
operation are translated at exchange rates prevailing at the balance sheet
date. Income and expense items are translated at an appropriate average
rate for the year. Exchange differences arising are recognised within other
comprehensive income and transferred to the Group’s translation reserve.
Such translation differences are recognised as income or expenses in the
income statement in the period in which the operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate. The Group enters into forward contracts
in order to hedge its exposure to certain foreign exchange transaction
risks relating to the functional currency in accordance with Group policy.
It also uses foreign currency borrowings and derivatives to hedge its net
investment exposure to certain overseas subsidiaries (see page 105 for
details of the Group’s accounting policies in respect of such derivative
financial instruments).
Operating leases
Rentals payable under operating leases are charged to the income
statement on a straight-line basis over the term of the relevant lease.
Benefits received and receivable (and costs paid and payable) as
an incentive to enter into an operating lease are also spread on
a straight-line basis over the lease term.
Intangible assets
Brands
Internally generated brands are not capitalised. Acquired brands are
capitalised. Their values are calculated based on the Group’s valuation
methodology, which is based on valuations of discounted cash flows.
Brands are stated at cost, less accumulated amortisation and any
accumulated impairment losses.
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1. Significant accounting policies continued
Software development costs
Costs that are directly associated with the production of identifiable and
unique software controlled by the Group, and that generate economic
benefits beyond one year, are recognised as intangible assets. Computer
software development costs recognised as assets are amortised on a
straight-line basis over three to five years from the time of implementation,
and are stated at cost less accumulated amortisation and any
accumulated impairment losses.
Where an impairment loss subsequently reverses, the carrying amount
of the asset or cash-generating unit is increased to the revised estimate
of its recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset or cash-generating unit
in prior years. A reversal of an impairment loss is recognised as income
immediately, unless the relevant asset is carried at a revalued amount,
in which case the reversal of the impairment loss is treated as a
revaluation increase.
Property, plant and equipment
Land and buildings held for use in the production or supply of goods or
services, or for administrative purposes, are stated in the balance sheet
at cost less accumulated depreciation and any accumulated impairment
losses. Freehold land is not depreciated. Buildings are depreciated over
50 years.
Plant and equipment is stated at cost less depreciation.
Depreciation is charged so as to expense the cost or valuation of assets
over their estimated useful lives. Other assets are depreciated using the
straight-line method, on the following bases:
• Plant and equipment 20-25% per annum;
• Computer equipment 33% per annum; and
• Leasehold improvements over the term of the lease.
The gain or loss arising on the disposal or retirement of an asset is
determined as the difference between the sale proceeds, less any
selling expenses, and the carrying amount of the asset. This difference
is recognised in the income statement.
Impairment of tangible and intangible assets
At each balance sheet date, the Group reviews the carrying amounts
of its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where the asset
does not generate cash flows that are independent from other assets,
the Group estimates the recoverable amount of the cash-generating
unit to which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash flows
are discounted to their present value, using a pre-tax discount rate that
reflects current market assessments of the time value of money and the
risks specific to the asset for which the estimates of future cash flows
have not been adjusted.
If the recoverable amount of an asset is estimated to be less than
its carrying amount, the carrying amount of the asset is reduced to its
recoverable amount. If the recoverable amount of a cash-generating unit
is estimated to be less than its carrying amount, impairment losses are
allocated first to the intangible assets in the cash-generating unit.
If the full impairment of intangible assets is not sufficient to reduce the
carrying value of the cash-generating unit to its recoverable amount,
tangible fixed assets must then be impaired. If the recoverable amount
of tangible fixed assets exceeds their carrying value, no further impairment
is required. An impairment loss is recognised as an expense immediately,
unless the relevant asset is carried at a revalued amount, in which case
the impairment loss is treated as a revaluation decrease to the extent
that previous revaluations have increased the value of the asset.
Financial instruments
Financial assets and financial liabilities are recognised on the Group’s
balance sheet when the Group becomes a party to the contractual
provisions of the instrument.
Trade receivables and other receivables
Trade receivables on normal terms excluding derivative financial
instruments do not carry any interest and are stated at their nominal
value as reduced by appropriate allowances for estimated unrecoverable
amounts. Trade receivables on extended terms, particularly in respect of
land, are measured at amortised cost using the effective interest method,
less any impairment. Interest income is recognised by applying the
effective interest rate. Derivative financial instruments are measured
at fair value.
Mortgage receivables
Mortgage receivables relate to sales incentives including shared equity
loans. The receivable is recorded at amortised cost.
Shared equity loans are separated into a loan receivable and a non-
closely related embedded derivative asset for accounting purposes as
allowed under IAS 39 ‘Financial instruments’. The loan is measured at
amortised cost and the embedded derivative is measured at fair value
through profit or loss with any subsequent impairment charged through
profit and loss. The fair value of the derivative is based on a national
house price index.
Financial liabilities and equity instruments
Financial liabilities and equity instruments are classified according to
the substance of the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest in the assets
of the Group after deducting all of its liabilities. Equity instruments issued
by the Parent Company are recorded as the proceeds are received, net of
direct issue costs.
Borrowings
Interest-bearing bank loans and overdrafts are recorded as the proceeds
are received, net of direct issue costs.
Trade payables
Trade payables on normal terms are not interest-bearing and are stated
at their nominal value. Trade payables on extended terms, particularly in
respect of land, are recorded at their fair value at the date of acquisition of
the asset to which they relate. The discount to nominal value is amortised
over the period of the credit term and charged to finance costs.
Derivative financial instruments and hedge accounting
The Group uses forward exchange contracts to hedge transactions
denominated in foreign currencies. The Group also uses foreign currency
borrowings and derivatives to hedge its net investment exposure to
movements in exchange rates on translation of certain individual
financial statements denominated in foreign currencies other than
Sterling which is the functional currency of the Parent Company.
104
104
105
105
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
1. Significant accounting policies continued
Interest rate derivatives are used to manage interest rate risk in respect of
borrowings. The Group does not use derivative financial instruments for
speculative purposes.
Derivative financial instruments are measured at fair value. Changes
in the fair value of derivative financial instruments that are designated
and effective as hedges of net investments in foreign operations are
recognised directly in other comprehensive income and the ineffective
portion, if any, is recognised immediately in the consolidated
income statement.
For an effective hedge of an exposure to changes in fair value, the
hedged item is adjusted for changes in fair value attributable to the risk
being hedged with the corresponding entry in the consolidated income
statement. Gains or losses from remeasuring the derivative, or for non-
derivatives the foreign currency component of its carrying amount, are
also recognised in the consolidated income statement.
Changes in the fair value of derivative financial instruments that do not
qualify for hedge accounting are recognised in the consolidated income
statement as they arise.
Hedge accounting is discontinued when the hedging instrument expires
or is sold, terminated, or exercised, or no longer qualifies for hedge
accounting. At that time, any cumulative gain or loss on the hedging
instrument recognised in other comprehensive income is retained
in accumulated other comprehensive income until the forecasted
transaction occurs. If a hedged transaction is no longer expected to
occur, the net cumulative gain or loss recognised in accumulated other
comprehensive income is transferred to the income statement for the
period. If a derivative financial instrument does not meet the specific
criteria of IAS 39 ‘Financial instruments’ for hedge accounting it is
presented as a held for trading asset or liability.
Customer deposits
Customer deposits are recorded as a liability within ‘other payables’
on receipt and released to the income statement as revenue upon
legal completion.
Provisions
Provisions are recognised when the Group has a present obligation as
a result of a past event, and it is probable that the Group will be required
to settle that obligation. Provisions are measured at the Directors’ best
estimate of the expenditure required to settle the obligation at the
balance sheet date and are discounted to present value where
the effect is material.
Inventories
Inventories are initially stated at cost or at the fair value at acquisition date
when acquired as part of a business combination and then held at the
lower of this initial amount and net realisable value. Costs comprise direct
materials and, where applicable, direct labour and those overheads that
have been incurred in bringing the inventories to their present location and
condition. Net realisable value represents the estimated selling price less
all estimated costs of completion and costs to be incurred in marketing,
selling and distribution. Land is recognised in inventory when the
significant risks and rewards of ownership have been transferred
to the Group.
Non-refundable land option payments are initially recognised in inventory.
They are reviewed regularly and written off to the income statement when
it is probable that the option will not be exercised.
Taxation
The tax charge represents the sum of the tax currently payable and
deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from profit before tax as reported in the income statement
because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never
taxable or deductible. The Group’s liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by the
balance sheet date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the
computation of taxable profit, and is accounted for using the balance
sheet liability method. Deferred tax liabilities are generally recognised for
all taxable temporary differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the tax profit nor the accounting profit.
Deferred tax liabilities are also recognised for taxable temporary
differences arising on investments in subsidiaries and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference
will not reverse in the foreseeable future.
Deferred tax is measured on a non-discounted basis using the tax rates
and laws that have then been enacted or substantively enacted by the
balance sheet date.
The carrying amount of deferred tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset
to be recovered. Deferred tax is charged or credited to the income
statement, except when it relates to items charged or credited directly
to other comprehensive income or equity, in which case the deferred
tax is also dealt with in other comprehensive income or equity.
Share-based payments
The Group has applied the requirements of IFRS 2 ‘Share-based
payments’. The Group issues equity-settled share-based payments to
certain employees. Equity-settled share-based payments are measured at
fair value at the date of grant. The fair value is expensed on a straight-line
basis over the vesting period, based on the Group’s estimate of shares
that will eventually vest after adjusting for the effect of non-market
vesting conditions.
Employee benefits
The Group accounts for pensions and similar benefits under IAS 19
‘Employee benefits’ (amended 2011). In respect of defined benefit
plans, a finance charge is determined on the net defined benefit
pension liability. The operating and financing costs of such plans are
recognised separately in the income statement; service costs are
spread systematically over the lives of employees; and certain liability
management costs and financing costs are recognised in the periods
in which they arise. Actuarial gains and losses are recognised immediately
in the statement of comprehensive income.
Payments to defined contribution schemes are charged as an expense
as they fall due.
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2. Key sources of estimation uncertainty and critical
accounting judgements
Estimation of revenue recognised
In order to determine the profit that the Group is able to recognise on the
proportion of completions in respect of social housing and other long term
contracts for the period, internal site valuations are carried out for each
development at regular intervals throughout the year. This is to ensure
any funding advances are only recognised as revenue when the work
has been completed, including the appropriate allocation of infrastructure.
The valuations include an estimation of the costs to complete and
remaining revenues which may differ from the actual costs incurred
and revenues received on completion.
Carrying value of inventory and cost allocation
In order to assess the appropriateness of the carrying value of inventory,
the Group is required to make estimations of sales prices, costs and
margins expected on sites in order to determine whether any write-downs
or reversals are required to ensure inventory is stated at the lower of cost
and net realisable value.
The following new and revised standards and interpretations have
also been adopted in the current year. Their adoption has not had any
significant impact on the amounts reported in these financial statements,
though disclosure has been amended to reflect the new requirements.
Accounting for future transactions may be affected in the future.
• Amendments to IAS 19 ‘Defined Benefit Plans: Employee
Contributions;
• Annual improvements to IFRS 2010 – 2012 cycle; and
• Annual improvements to IFRS 2011 – 2013 cycle.
Standards and interpretations in issue but not yet effective or
requiring mandatory adoption
At the date of publishing these financial statements the following new
and revised standards and interpretations were in issue but were not yet
effective or requiring mandatory adoption (and in some cases had not
yet been adopted by the EU).
None of these new and revised standards and interpretations have been
adopted early by the Group:
Following previous significant impairments of inventories, the Group
has again undertaken a detailed review on a site-by-site basis of the net
realisable value of its land and work in progress. The net realisable value
exercise is highly sensitive to the assumptions used and we therefore also
consider when the inventory is likely to be realised, whether or not there
has been a sustained change in market conditions that previously caused
the inventory to be impaired and the wider economic environment existing
at the balance sheet date.
• Annual improvements to IFRS 2012-2014 cycle;
• Amendment to IFRS 11 ‘Joint arrangements’ on acquisition of an
interest in a joint operation;
• Amendment to IAS 16 ‘Property, plant and equipment’ and IAS 38
‘Intangible assets’ on depreciation and amortisation;
• Amendments to IAS 27 ‘Separate financial statements’ on the
equity method;
The Group has a net addition of £0.6 million (2014: £18.7 million reversal)
of inventory impairments in the year. This consists of a UK reversal of
£6.6 million (2014: £27.0 million) and further write-downs of £7.2 million
(2014: £8.3 million). See Note 6.
Identification of costs which should be capitalised into inventory and the
allocation of these across sites, phases and plots is an area of judgement.
In order to ensure correct allocation and phasing, regular reviews of the
components of the inventory balance are undertaken, along with central
controls around cost allocation across developments.
Employee benefits
The value of the defined benefit plan assets and liabilities is determined on
various long term actuarial assumptions, including future rates of inflation,
growth, yields, returns on investments and mortality rates. Changes in
these assumptions over time and differences to the actual outcome will
be reflected in the statement of comprehensive income. Note 20 details
the main assumptions in accounting for the Group’s defined benefit
pension schemes.
Tax and deferred tax
Aspects of tax accounting require management judgement and
interpretation of tax legislation across many jurisdictions, in some cases
relating to items which may not be resolved with the relevant tax authority
for many years.
In determining the carrying amounts of deferred tax assets, management
is required to assess the timing of the utilisation of provisions for tax
purposes and whether it is probable that sufficient taxable profits
will be available to enable the asset to be recovered.
Adoption of new and revised standards and interpretations
The following new standards, amendments to standards or interpretations
have been adopted by the European Union and are mandatory for the first
time for years beginning on or after 1 January 2015.
• Amendments to IAS 1 ‘Presentation of financial statements’ and
• Amendments to IFRS 10 ‘Consolidated financial statements’,
IFRS 12 ‘Disclosure of interests in other entities’ and IAS 28
‘Investments in associates and joint ventures’ on applying
the consolidation exemption.
The Directors do not expect that the adoption of the standards listed
above will have a material impact on the financial statements of the
Group in future periods.
IFRS 15 ‘Revenue from contracts with customers’ is effective for
annual periods beginning on or after 1 January 2018 (subject to
EU endorsement). IFRS 9 ‘Financial instruments’, with associated
amendments, is effective for annual periods beginning on or after
1 January 2018 (subject to EU endorsement). IFRS 16 ‘Leases’ is
effective for annual periods beginning on or after 1 January 2019.
The Group has begun, but not yet completed, its assessment of the
potential impact of these three standards. This assessment will be
completed well ahead of the EU endorsed implementation dates so
any impact can be understood prior to adoption.
3. General information
Taylor Wimpey plc is a Company incorporated in the United Kingdom
under the Companies Act 2006. The address of the registered office is
given on page 157. The nature of the Group’s operations and its principal
activities are set out in the Strategic Report on pages 4 to 41.
These financial statements are presented in pounds Sterling because that
is the currency of the primary economic environment in which the Group
operates. Foreign operations are included in accordance with the policy
set out on page 104.
106
106
107
107
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
4. Revenue
An analysis of the Group’s continuing revenue is as follows:
£ million
Housing:
Private sales
Partnership housing
Other
Total housing
Land sales
Revenue for the year
2015
2014
2,780.9
311.7
11.3
3,103.9
35.9
3,139.8
2,398.8
251.0
17.7
2,667.5
18.6
2,686.1
Housing revenue includes £50.1 million (2014: £96.1 million) in respect of the value of properties accepted in part exchange by the Group.
5. Operating segments
The Group operates in two countries, being the United Kingdom and Spain, both of which were previously reported as operating segments. During
2015, following a review of the operational structure of the business, the previous South Division of the UK Housing business was separated into the
Central and South West Division, and the London and South East Division, while the North Division remained unchanged. The Chairmen of the two
new Divisions joined the Group Management Team alongside the Chairman of the North Division as well as the Managing Director of the Central
London regional business (which sits within the London and South East Division), who also has responsibility for the Group’s integrated London
strategy. The information on segment performance presented to the Group’s chief operating decision maker was also revised to reflect the new
operating structure.
In response to these changes management has updated its identification of the Group’s operating segments, determining that in the United Kingdom,
for management reporting and control purposes, there are now four geographical operating segments, as well as an additional operating segment
covering the corporate functions, Major Developments and Strategic Land. However management has determined that it is appropriate for the London
and South East Division and the Central London regional business to be aggregated as one operating segment due to the fact that they share similar
economic characteristics. In making this judgement management has taken into consideration the fact that the Group’s developments within the
Greater London area are undertaken by several regional businesses within the London and South East Division as well as the Central London regional
business and as such the Group’s exposure to the London market extends beyond the Central London regional business. Management has also
assessed that both segments have similar long term financial performance, as demonstrated by similar average gross margins, as well as similar
production processes, types of customers, sales channels and regulatory environments.
Segment information about these businesses is presented below:
For the year to 31 December 2015
£ million
Revenue
External sales
Result
Profit/(loss) on ordinary activities before joint ventures, finance costs and
exceptional items
Share of results of joint ventures
Profit/(loss) on ordinary activities before finance costs, exceptional items and after
share of results of joint ventures
Exceptional items (Note 6)
Profit on ordinary activities before finance costs, after share of results of joint ventures
and exceptional items
Net finance costs
Profit on ordinary activities before taxation
Taxation (including exceptional tax)
Profit for the year
Central &
South
West
Division
North
Division
London &
South East
Division Corporate
Spain
Total
1,093.8
1,075.4
911.6
0.9
58.1
3,139.8
251.1
(0.1)
243.2
–
198.2
5.0
(70.4)
–
10.0
–
632.1
4.9
251.0
243.2
203.2
(70.4)
10.0
637.0
(0.6)
636.4
(33.2)
603.2
(113.4)
489.8
108
108
5. Operating segments continued
For the year to 31 December 2015
£ million
Assets and liabilities
At 31 December 2015
Segment operating assets
Joint ventures
Segment operating liabilities
Group net operating assets
Net current taxation
Net deferred taxation
Net cash
Net assets
For the year to 31 December 2015
£ million
Other information
Property, plant and equipment additions
Software development additions
Property, plant and equipment depreciation
Software amortisation
For the year to 31 December 2014
£ million
Revenue
External sales
Result
Profit/(loss) on ordinary activities before joint ventures, finance costs and
exceptional items
Share of results of joint ventures
Profit on ordinary activities before finance costs, exceptional items and after share
of results of joint ventures
Exceptional items (Note 6)
Profit on ordinary activities before finance costs, after share of results of joint ventures
and exceptional items
Net finance costs
Profit on ordinary activities before taxation
Taxation (including exceptional tax)
Profit for the year
Assets and liabilities
At 31 December 2014
Segment operating assets
Joint ventures
Segment operating liabilities
Group net operating assets
Net current taxation
Net deferred taxation
Net cash
Net assets
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Central &
South
West
Division
North
Division
London &
South East
Division Corporate
Spain
Total
1,198.0
2.2
(387.2)
813.0
1,273.8 1,417.0
21.4
(444.2)
994.2
3.0
(571.7)
705.1
148.0
0.3
(260.6)
(112.3)
86.5
0.2
(44.1)
42.6
4,123.3
27.1
(1,707.8)
2,442.6
1.7
55.7
223.3
2,723.3
Central &
South
West
Division
North
Division
London &
South East
Division Corporate
Spain
Total
0.1
–
(0.1)
–
2.8
–
(0.5)
–
–
–
(0.3)
–
2.6
1.5
(1.0)
(1.3)
0.1
–
(0.1)
–
5.6
1.5
(2.0)
(1.3)
North
Division
Central &
South West
Division
London &
South East
Division Corporate
Spain
Total
931.8
890.4
825.7
4.5
33.7
2,686.1
202.7
0.8
179.5
–
153.0
1.8
(61.3)
–
203.5
179.5
154.8
(61.3)
4.2
–
4.2
1,110.9
2.5
(341.7)
771.7
1,242.4 1,124.9
35.4
(341.7)
818.6
–
(515.5)
726.9
158.9
0.5
(261.3)
(101.9)
86.0
0.2
(36.5)
49.7
478.1
2.6
480.7
18.7
499.4
(30.6)
468.8
(94.4)
374.4
3,723.1
38.6
(1,496.7)
2,265.0
–
157.5
112.8
2,535.3
109
109
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
5. Operating segments continued
For the year to 31 December 2014
£ million
Other information
Property, plant and equipment additions
Software development additions
Property, plant and equipment depreciation
Software amortisation
North
Division
Central &
South West
Division
London &
South East
Division Corporate
Spain
Total
2.3
–
(0.2)
–
6.1
–
(0.2)
–
0.8
–
(0.1)
–
0.4
–
(0.6)
(1.7)
0.1
–
(0.1)
–
9.7
–
(1.2)
(1.7)
6. Net operating expenses and profit on ordinary activities before finance costs
Profit on ordinary activities before financing costs for continuing operations has been arrived at after charging/(crediting):
£ million
Administration expenses
Net other income
Exceptional items
2015
172.1
(16.2)
0.6
2014
158.6
(15.8)
(18.7)
7. Staff costs
Average number employed
United Kingdom
Spain
£ million
Remuneration
Wages and salaries
Redundancy costs
Social security costs
Other pension costs
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
2015
Number
2014
Number
4,177
83
4,260
3,784
73
3,857
2015
2014
185.4
0.4
25.0
10.0
220.8
164.6
2.1
22.1
9.0
197.8
Net other income includes profits on the sale of property, plant and equipment, revaluation of certain shared equity mortgage receivables, and ground
rents receivable.
The information required by the Companies Act 2006 and the Listing Rules of the Financial Conduct Authority is contained in Note 30 and pages 68
to 85 in the Directors’ Remuneration Report.
8. Finance costs and interest receivable
£ million
External interest receivable
Finance costs are analysed as follows:
£ million
Interest on overdrafts, bank and other loans
Movement on interest rate derivatives and foreign exchange movements
Unwinding of discount on land creditors and other items
Net notional interest on pension liability (Note 20)
2015
0.7
0.7
2015
11.6
0.7
12.3
15.6
6.0
33.9
2014
0.6
0.6
2014
14.4
0.2
14.6
9.1
7.5
31.2
Exceptional items:
£ million
Net addition/(reversal) of inventory impairments (Note 15)
Exceptional items debited/(credited) to cost of sales
2015
0.6
0.6
2014
(18.7)
(18.7)
The Group has seen a sustained improvement in the UK housing market and improvement in confidence in the wider economy, driven by continued
low interest rates, improved mortgage availability and Government incentives, including the ‘Help to Buy’ scheme.
Whilst the UK housing market has continued to improve, specific factors on certain impaired sites has resulted in a net addition of £0.6 million to
the provision (2014: £18.7 million reversal). This consisted of £6.6 million (2014: £27.0 million) of releases and £7.2 million (2014: £8.3 million) of
additional NRV requirements in the UK. No further write-downs have been booked in Spain (2014: £nil).
Profit on ordinary activities before financing costs for continuing operations has been arrived at after charging/(crediting):
£ million
Cost of inventories recognised as expense in cost of sales, before write-downs of inventories
Impairment of inventories
Reversal of inventory impairment provisions
Property, plant and equipment depreciation
Payments under operating leases
The remuneration paid to Deloitte LLP, the Group’s external auditor, is as follows:
£ million
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts
and consolidated financial statements
Fees payable to the Company’s auditor and its associates for other services to the Group:
The audit of the Company’s subsidiaries pursuant to legislation
Total audit fees
Other services pursuant to legislation
Tax services
Other assurance services
Other services
Total non-audit fees
Total fees
2015
2,261.8
7.2
(6.6)
2.0
2.0
2014
1,985.0
8.3
(27.0)
1.2
3.8
2015
2014
0.1
0.3
0.4
0.1
–
–
0.1
0.2
0.6
0.1
0.3
0.4
0.1
0.1
–
–
0.2
0.6
Non-audit services in 2015 and 2014 predominantly relate to work undertaken as a result of Deloitte LLP’s role as auditor, or work resulting from
knowledge and experience gained as part of the role. Other services relate to advisory services relating to pension liability management consultation
and real estate advisory work. The work was either the subject of a competitive tender or was best performed by the Group’s auditor because of its
knowledge of the Group.
Tax services include advisory services for Taylor Wimpey plc and subsidiaries. See page 65 for details of the Group’s policies in respect of non-audit
services and approval by the Audit Committee.
110
110
111
111
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
9. Taxation
Tax (charged)/credited in the income statement for continuing operations is analysed as follows:
£ million
Current tax:
UK corporation tax:
Foreign tax:
Deferred tax:
UK:
Foreign tax:
Current year
Prior years
Current year
Prior years
Current year
Prior year
Current year
Prior year
2015
2014
(11.2)
(0.8)
(0.7)
–
(12.7)
(107.8)
(0.9)
8.0
–
(100.7)
(113.4)
(1.0)
0.1
(0.2)
–
(1.1)
(91.4)
(1.9)
–
–
(93.3)
(94.4)
Corporation tax is calculated at 20.25% (2014: 21.5%) of the estimated assessable profit for the year in the UK. Taxation outside the UK is calculated
at the rates prevailing in the respective jurisdictions.
The tax charge for the year includes a credit in respect of exceptional items of £8.1 million (2014: £4.0 million charge). £8.0 million of this amount
relates to the recognition of Spanish temporary differences (2014: £nil), with the balance related to movements to the exceptional impairment provision
(2014: £4.0 million charge).
The income statement charge for 2015 includes a charge of £0.6 million relating to the impact on the deferred tax asset of the 2% reduction in
UK corporation tax from 20% to 18%.
The charge for the year can be reconciled to the profit per the income statement as follows:
£ million
Profit before tax
Tax at the UK corporation tax rate of 20.25% (2014: 21.5%)
Net over/(under) provision in respect of prior years
Tax effect of expenses that are not deductible in determining taxable profit
Unrecognised temporary differences utilised
Recognition of deferred tax asset relating to non-trading losses
Impact of 2% rate reduction on deferred tax
Recognition of deferred tax asset relating to Spanish business
Other rate impacting adjustments
Tax charge for the year
2015
603.2
(122.1)
0.5
0.3
2.0
–
(0.6)
8.0
(1.5)
(113.4)
2014
468.8
(100.8)
(1.8)
4.0
1.0
3.3
–
–
(0.1)
(94.4)
10. Earnings per share
Basic earnings per share
Diluted earnings per share
Adjusted basic earnings per share
Adjusted diluted earnings per share
Weighted average number of shares for basic/adjusted earnings per share – million
Weighted average number of shares for diluted basic/adjusted earnings per share – million
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
2015
15.1p
14.9p
14.9p
14.7p
2014
11.6p
11.5p
11.2p
11.1p
3,247.3
3,278.8
3,224.4
3,253.1
Adjusted basic and adjusted diluted earnings per share, which exclude the impact of exceptional items and any associated net tax charges, are
presented to provide a better measure of the underlying performance of the Group. A reconciliation of earnings attributable to equity shareholders
used for basic and diluted earnings per share to that used for adjusted earnings per share is shown below.
£ million
Earnings for basic and diluted earnings per share
Adjust for exceptional net addition/(reversal) of inventory write-downs (Note 15)
Adjust for tax on exceptional items (Note 9)
Adjust for exceptional deferred tax credit (Note 9)
Earnings for adjusted basic and adjusted diluted earnings per share
11. Intangible assets
£ million
Cost
At 1 January 2014
Additions
At 31 December 2014
Additions
At 31 December 2015
Amortisation/impairment
At 1 January 2014
Charge for the year
At 31 December 2014
Charge for the year
At 31 December 2015
Carrying amount
31 December 2015
31 December 2014
2015
490.1
0.6
(0.1)
(8.0)
482.6
Software
development
costs
6.5
–
6.5
1.5
8.0
(2.3)
(1.7)
(4.0)
(1.3)
(5.3)
2.7
2.5
Brands
140.2
–
140.2
–
140.2
(140.2)
–
(140.2)
–
(140.2)
–
–
2014
374.4
(18.7)
4.0
–
359.7
Total
146.7
–
146.7
1.5
148.2
(142.5)
(1.7)
(144.2)
(1.3)
(145.5)
2.7
2.5
The Group has assessed its brands and their associated values and has concluded that given the majority of the legacy brands are currently not used,
it would not be appropriate to reverse any of the previously recognised impairment charges.
The amortisation of software development costs is recognised within administration expenses in the income statement.
112
112
113
113
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
12. Property, plant and equipment
13. Interests in joint ventures continued
£ million
Cost
At 1 January 2014
Additions
Disposals
At 31 December 2014
Additions
Disposals
At 31 December 2015
Accumulated depreciation
At 1 January 2014
Disposals
Charge for the year
At 31 December 2014
Disposals
Charge for the year
At 31 December 2015
Carrying amount
At 31 December 2015
At 31 December 2014
13. Interests in joint ventures
£ million
Aggregated amounts relating to share of joint ventures:
Current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Carrying amount
Loans to joint ventures
Total interests in joint ventures
£ million
Group share of:
Revenue
Cost of sales
Gross profit
Net operating expenses
Profit on ordinary activities before finance costs
Finance costs
Profit on ordinary activities before tax
Taxation
Share of joint ventures’ post-tax results for the year
114
114
Freehold land
and buildings
Plant,
equipment
and leasehold
improvements
3.4
7.6
–
11.0
4.0
(0.2)
14.8
(0.1)
–
(0.1)
(0.2)
–
(0.5)
(0.7)
14.1
10.8
14.1
2.1
(1.7)
14.5
1.6
(0.7)
15.4
(9.1)
1.7
(1.1)
(8.5)
0.5
(1.5)
(9.5)
5.9
6.0
Total
17.5
9.7
(1.7)
25.5
5.6
(0.9)
30.2
(9.2)
1.7
(1.2)
(8.7)
0.5
(2.0)
(10.2)
20.0
16.8
2015
2014
52.9
52.9
(28.8)
(15.6)
(44.4)
8.5
18.6
27.1
68.1
68.1
(29.6)
(28.6)
(58.2)
9.9
28.7
38.6
2015
2014
38.3
(30.7)
7.6
(1.0)
6.6
(0.5)
6.1
(1.2)
4.9
23.4
(19.5)
3.9
(0.7)
3.2
(0.1)
3.1
(0.5)
2.6
The Group has four material (2014: four) joint ventures whose principal activity is residential house building. The Group considers a joint venture to be
material when it is either financially or strategically important to the Group.
The particulars of the material joint ventures are as follows:
Country of incorporation
United Kingdom
United Kingdom
United Kingdom
United Kingdom
(a)
Interest held by subsidiary undertakings.
Name of joint venture equity accounted
in the consolidated accounts
Strada Developments Limited(a)
Greenwich Millennium Village Limited(a)
Chobham Manor Limited Liability Partnership(a)
Academy Central Limited Liability Partnership(a)
Taylor Wimpey plc interest in the
issued ordinary share capital
50%
50%
50%
62%
Whilst the percentage holding in Academy Central Limited Liability Partnership is over 50% the Partnership Agreement splits control equally between
the two partners.
The following two tables show summary financial information for these four material joint ventures. Unless specifically indicated, this information
represents 100% of the joint venture before intercompany eliminations.
£ million
Percentage ownership interest
Current assets (including cash and cash equivalents)
Current financial liabilities
Current other liabilities
Non-current financial liabilities
Net assets (100%)
Group share of net assets/(liabilities)
Revenue
Interest income
Income tax expense
(Loss)/profit for the year
Group share of (loss)/profit for the year
Dividends received from the joint venture during the year
Greenwich
Millennium
Village
2015
50%
49.1
(11.3)
(1.3)
(22.2)
14.3
7.1
50.2
–
(2.6)
9.8
4.9
–
Strada
2015
50%
4.3
–
(0.5)
(0.5)
3.3
1.7
–
–
–
(0.2)
(0.1)
0.8
Chobham
Manor
2015
50%
40.8
(39.3)
–
(7.7)
(6.2)
(3.1)
6.7
–
–
(1.6)
(0.8)
–
Academy
Central
2015
62%
1.9
–
–
(0.7)
1.2
0.8
15.6
–
–
1.1
0.7
5.5
During the year, no entity charged depreciation, amortisation or interest expense. No entity had discontinued operations or items of other
comprehensive income.
£ million
Percentage ownership interest
Current assets (including cash and cash equivalents)
Current financial liabilities
Current other liabilities
Non-current financial liabilities
Net assets (100%)
Group share of net assets/(liabilities)
Revenue
Interest income
Income tax expense
Profit/(loss) for the year
Group share of profit/(loss) for the year
Dividends received from the joint venture during the year
Greenwich
Millennium
Village
2014
50%
76.4
(47.5)
(3.6)
(20.8)
4.5
2.2
7.5
–
(0.4)
1.2
0.6
–
Chobham
Manor
2014
50%
15.9
(2.3)
(0.6)
(17.6)
(4.6)
(2.3)
1.2
–
–
(2.5)
(1.2)
–
Strada
2014
50%
6.7
–
(1.7)
–
5.0
2.5
8.5
0.1
(0.5)
1.6
0.8
2.5
Academy
Central
2014
62%
23.9
(2.2)
–
(12.6)
9.1
5.6
23.7
–
–
3.4
2.1
–
During the year, no entity charged depreciation, amortisation or interest expense. No entity had discontinued operations or items of other
comprehensive income.
Total
2015
96.1
(50.6)
(1.8)
(31.1)
12.6
6.5
72.5
–
(2.6)
9.1
4.7
6.3
Total
2014
122.9
(52.0)
(5.9)
(51.0)
14.0
8.0
40.9
0.1
(0.9)
3.7
2.3
2.5
115
115
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
13. Interests in joint ventures continued
£ million
Aggregated amounts relating to share of individually immaterial joint ventures
Current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Carrying amount
Loans to individually immaterial joint ventures
Total interests in individually immaterial joint ventures
£ million
Group share of:
Revenue
Cost of sales
Gross profit
Net operating expenses
Profit on ordinary activities before finance costs
Finance costs
Profit on ordinary activities before tax
Taxation
Share of individually immaterial joint ventures post-tax results for the year
4.6
4.6
(2.6)
–
(2.6)
2.0
3.6
5.6
3.8
3.8
(0.3)
(1.6)
(1.9)
1.9
1.7
3.6
2015
2014
0.2
–
0.2
–
0.2
–
0.2
–
0.2
0.7
(0.1)
0.6
(0.1)
0.5
(0.1)
0.4
(0.1)
0.3
14. Deferred tax
The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon during the current and prior
reporting year.
£ million
At 1 January 2014
Charge to income
(Charge)/credit to equity
At 31 December 2014
(Charge)/credit to income
Charge to equity
At 31 December 2015
Share-
based
payments
8.9
(0.3)
(1.0)
7.6
–
(0.4)
7.2
Capital
allowances
5.8
(1.3)
–
4.5
(0.5)
–
4.0
Retirement
benefit
obligations
36.4
(6.1)
5.2
35.5
(2.8)
(0.7)
32.0
Other
temporary
differences
(0.2)
(0.1)
–
(0.3)
1.4
–
1.1
Losses
195.7
(85.5)
–
110.2
(98.8)
–
11.4
Total
246.6
(93.3)
4.2
157.5
(100.7)
(1.1)
55.7
Closing deferred tax on UK temporary differences has been calculated at the tax rates that are expected to apply for the period when the asset
is realised or the liability is settled. Accordingly, the temporary differences have been calculated at rates between 20% and 18% (2014: 20%).
The effect of the reduction in the UK corporation tax rate from 20% to 18% is £0.6 million in the income statement and £2.5 million in the statement
of comprehensive income and statement of changes in equity (2014: nil).
2015
2014
14. Deferred tax continued
The net deferred tax balance is analysed into assets and liabilities as follows:
£ million
Deferred tax assets
Deferred tax liabilities
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
2015
57.1
(1.4)
55.7
2014
159.4
(1.9)
157.5
The Group has not recognised temporary differences relating to tax losses carried forward and other temporary differences amounting to £3.5 million
(2014: £1.0 million) in the UK and £68.4 million (2014: £104.2 million) in Spain. The UK losses have not been recognised as they are predominantly
non-trading in nature and insufficient certainty exists as to their future utilisation. The losses in Spain have not been recognised due to uncertainty of
sufficient taxable profits in the future against which to utilise the losses.
At the balance sheet date, the Group has unused UK capital losses of £264.3 million (2014: £255.4 million). No deferred tax asset has been recognised
in respect of the capital losses at 31 December 2015 because the Group does not believe that it is probable that these capital losses will be utilised in
the foreseeable future.
15. Inventories
£ million
Raw materials and consumables
Finished goods and goods for resale
Residential developments:
Land(a)
Development and construction costs
Commercial, industrial and mixed development properties
(a) Details of land creditors are in Note 18.
2015
–
17.1
2,743.7
1,128.3
2.1
3,891.2
2014
–
22.1
2,582.4
882.7
2.9
3,490.1
In 2015 we saw the continued positive benefit of the improved environment in all of our regional markets. This is underpinned by solid consumer
confidence and good mortgage availability.
Whilst the UK housing market has continued to improve, specific issues on certain impaired sites have resulted in the Group recording a net addition
to impairment write-downs in the year of £0.6 million (2014: £18.7 million reversal).
The net addition in the UK consists of a reversal of previous write-downs of £6.6 million (2014: £27.0 million) and additional write-downs to the lower
of cost and net realisable value of £7.2 million (2014: £8.3 million) on previously impaired sites.
In the year 6% (2014: 14%) of the Group’s UK completions were from pre-2009 impaired sites.
At the balance sheet date the Group held inventory in the UK that had been written down to net realisable value of £115.2 million (2014: £269.6 million)
with associated impairments of £124.2 million (2014: £158.1 million).
The UK net realisable value assessment of inventory is highly sensitive to small changes in judgements and the table below provides an indication of
the impact to the inventory held on the balance sheet of 1% movements in selling prices and build costs.
£ million
31 December 2015
31 December 2014
+1% selling
price
10.9
12.4
-1% selling
price
(11.4)
(14.2)
+1% build
cost
(11.1)
(12.9)
-1% build
cost
9.2
10.9
There has been continued improvement in the Spanish housing market during the year. However, this improvement has been on newer sites which
have been acquired in better locations. Sales rates and prices on sites which have been previously impaired remain low. In the year, 53 plots (2014: 50)
were completed in Spain that had previously been impaired. In Spain, there was inventory written down to net realisable value of £24.3 million as at
31 December 2015 (2014: £27.0 million), with associated impairments of £43.5 million (2014: £48.1 million).
116
116
117
117
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
15. Inventories continued
The table below details the movements recorded on the write-downs on impaired inventory recorded through the income statement in the year.
Inventory write-downs
£ million
1 January
Utilised
Net addition/(reversal)
Foreign exchange
31 December
16. Other financial assets
Trade and other receivables
£ million
Trade receivables
Other receivables
2015
206.2
(35.6)
0.6
(3.5)
167.7
Current
Non-current
2015
80.6
33.4
114.0
2014
45.1
57.5
102.6
2015
94.4
1.0
95.4
2014
265.1
(36.0)
(18.7)
(4.2)
206.2
2014
109.9
1.2
111.1
The average credit period taken on sales is 11 days (2014: eight days). An allowance has been made for estimated irrecoverable amounts from trade
receivables of £1.2 million (2014: £2.5 million). This allowance has been determined by reference to past default experience and relates mainly to
provisions against mortgage debtors.
Included within trade receivables are mortgage receivables of £94.6 million (2014: £104.8 million) including shared equity loans. Shared equity loans
are provided to certain customers to facilitate their house purchase. They are accounted for as a host contract representing a loan receivable and a
non-closely related embedded derivative asset, as allowed under IAS 39 ‘Financial instruments’. The loan is measured at amortised cost and the
embedded derivative is measured at fair value through profit or loss.
The embedded derivative fair value movement is established by reference to a published national house price index. The fair value of the derivative
is £7.2 million (2014: £9.4 million) and is included in the amount above.
18. Trade and other payables
£ million
Trade payables
Other payables
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
Current
Non-current
2015
598.1
495.3
1,093.4
2014
505.7
404.3
910.0
2015
291.7
110.3
402.0
2014
261.0
100.5
361.5
Other payables include customer deposits for reserving plots of £118.9 million (2014: £65.8 million), £151.0 million (2014: £147.8 million) relating to
certain accruals associated with completed sites, and £83.8 million (2014: £86.7 million) of repayable grants.
Land creditors
(included within trade payables) are due as follows:
£ million
Due within one year
Due in more than one year
Land creditors are denominated as follows:
£ million
Sterling
Euros
2015
342.7
287.1
629.8
2015
622.5
7.3
629.8
2014
228.4
259.3
487.7
2014
480.8
6.9
487.7
Land creditors of £334.8 million (2014: £304.0 million) are secured against land acquired for development, or supported by bond or guarantee.
19. Financial instruments and fair value disclosures
Capital management
The Group’s policy is to maintain a strong credit rating for the business and to have an appropriate funding structure. Shareholders’ equity and long
term debt are used to finance property, plant and equipment and the medium to long term landbank. Revolving credit facilities are used to fund net
current assets including development and construction costs. The Group’s financing facilities contain the usual financial covenants including minimum
interest cover and maximum gearing. The Group met these requirements throughout the year.
Cash and cash equivalents
£ million
Cash and cash equivalents (see Note 19)
2015
323.3
2014
212.8
Financial assets and financial liabilities
Categories of financial assets and financial liabilities are as follows:
Cash and cash equivalents comprise cash held by the Group and short term bank deposits with an original maturity of three months or less.
The carrying amount of these assets approximates their fair value in both years.
17. Bank and other loans
£ million
Bank overdrafts repayable on demand
Bank loans
Other loans
2015
–
–
100.0
100.0
2014
–
–
100.0
100.0
Other loans were borrowed at variable rates of interest, from 1.7% to 5.0% (2014: 2.8% to 5.8%) during the year, and comprise a £100.0 million
(2014: £100.0 million) variable rate term loan with an investment fund.
£ million
Amount due for settlement after one year
Total borrowings
£ million
Analysis of borrowings by currency:
31 December 2015 and 31 December 2014
Sterling
2015
100.0
100.0
2014
100.0
100.0
Bank
overdraft
Bank and
other loans
–
–
100.0
100.0
Financial assets
£ million
Cash and cash equivalents
Land receivables
Trade and other receivables
Mortgage receivables
Fair value
hierarchy
b
b
b
a
Carrying value
31 December
2015
323.3
17.8
64.8
94.6
500.5
Fair value
31 December
2014
212.8
13.3
44.9
104.8
375.8
31 December
2015
323.3
17.8
64.8
94.6
500.5
31 December
2014
212.8
13.3
44.9
104.8
375.8
(a) Mortgage receivables relate to sales incentives including shared equity loans which are separated into a loan receivable and a non-closely related embedded derivative asset. The embedded
derivative is measured at fair value through profit and loss. The fair value of the derivative is established based on a publicly available national house price index, being significant other observable
inputs (level 2).
(b) The Directors consider the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values.
Land receivables and trade and other receivables are included in the balance sheet as trade and other receivables for current and non-current amounts.
Current and non-current trade and other receivables, as disclosed in Note 16, include £32.2 million (2014: £50.7 million) of non-financial assets.
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Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
19. Financial instruments and fair value disclosures continued
Financial liabilities
£ million
Overdrafts, bank and other loans
Land creditors
Trade and other payables
Fair value
hierarchy
b
b
b
Carrying value
31 December
2015
100.0
629.8
711.1
1,440.9
Fair value
31 December
2014
100.0
487.7
670.9
1,258.6
31 December
2015
100.0
629.8
711.1
1,440.9
31 December
2014
100.0
487.7
670.9
1,258.6
Land creditors are included in the balance sheet as trade and other payables for current and non-current amounts. Current and non-current trade
and other payables, as disclosed in Note 18, include £154.5 million (2014: £112.9 million) of non-financial liabilities.
The Group has designated the carrying value of €34.0 million (2014: €34.0 million) foreign currency forward contracts as a net investment hedge.
The fair value of the forward contract is based on observable forward exchange rates at the end of the period taking into account any adjustment
required for credit risk (level 2). At the year end the fair value of the derivative is negligible.
The Group has no financial instruments with fair values that are determined by reference to significant unobservable inputs (level 3), nor have there
been any transfers of assets or liabilities between levels of the fair value hierarchy. There are no non-recurring fair value measurements.
The Group has the following types of derivatives:
Designated as hedging instruments:
Currency forward contract to sell € against £
2015
Notional
amount
2015
Weighted
average fixed
2014
Notional
amount
2014
Weighted
average fixed
€34.0m
n/a
€34.0m
n/a
In addition, forward contracts have been entered into to hedge transaction risks on intra-Group loans to buy/(sell) against Sterling: €5.3 million and
C$(0.6) million (2014: €26.0 million and C$(0.6) million). The fair value of the forward contracts are not materially different to their book value as
they were entered into on or near 31 December in each year and mature less than one month later, hence the value of the derivative is negligible.
Market risk
The Group’s activities expose it to the financial risks of changes in both foreign currency exchange rates and interest rates. The Group aims to
manage the exposure to these risks by the use of fixed or variable rate borrowings, foreign currency borrowings and derivative financial instruments.
(a) Interest rate risk management
The Group is exposed to interest rate risk as the Group borrows funds at variable interest rates. The exposure to variable rate borrowings fluctuates
during the year due to the seasonal nature of cash flows relating to housing sales and the less certain timing of land payments. Group policy is to
manage the volatility risk by a combination of fixed rate borrowings and interest rate swaps such that the sensitivity to potential changes in variable
rates is within acceptable levels. Group policy does not allow the use of derivatives to speculate against changes to future interest rates and they are
only used to manage exposure to volatility. This policy has not changed during the year.
In order to measure the risk, variable rate borrowings and the expected interest cost for the year are forecast on a monthly basis and compared to
budget using management’s expectations of a reasonably possible change in interest rates. Interest expense volatility remained within acceptable
limits throughout the year. The Group does not currently have any outstanding fixed rate borrowings or interest rate swaps.
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
19. Financial instruments and fair value disclosures continued
Interest rate sensitivity
The effect on both income and equity, based on exposure to non-derivative floating rate instruments at the balance sheet date, is shown in the table
below. The Group does not have any outstanding interest rate derivatives.
The table assumes all other variables remain constant in accordance with IFRS 7.
0.25% increase in interest rates
£ million
Derivatives
Non-derivatives
0.25% decrease in interest rates
£ million
Derivatives
Non-derivatives
Sensitivity
income
2015
–
0.6
0.6
Sensitivity
income
2015
–
(0.6)
(0.6)
Sensitivity
equity
2015
–
0.6
0.6
Sensitivity
equity
2015
–
(0.6)
(0.6)
Sensitivity
income
2014
–
0.3
0.3
Sensitivity
income
2014
–
(0.3)
(0.3)
Sensitivity
equity
2014
–
0.3
0.3
Sensitivity
equity
2014
–
(0.3)
(0.3)
(b) Foreign currency risk management
The Group’s overseas activities expose it to the financial risks of changes in foreign currency exchange rates. Our Spanish subsidiary is the only foreign
operation of the Group.
The Group is not materially exposed to transaction risks as all Group companies conduct their business in their respective functional currencies. Group
policy requires that transaction risks are hedged to the functional currency of the subsidiary using foreign currency borrowings or derivatives where
appropriate.
The Group is also exposed to the translation risk from accounting for both the income and the net investment held in a functional currency other than
Sterling. The net investment risk is hedged using foreign currency borrowings and derivatives. Assets and liabilities denominated in non-functional
currencies are retranslated each month using the latest exchange rates. Income is also measured monthly using the latest exchange rates and
compared to a budget held at historical exchange rates. Other than the natural hedge provided by foreign currency borrowings, the translation
risk of income is not hedged using derivatives. The policy is kept under periodic review.
The Group’s exposure to, and the way in which it manages, exchange rate risk has not changed from the previous year.
Hedge accounting
Hedging activities are evaluated periodically to ensure that they are in line with Group policy. Forward contracts are currently being used to hedge
the net investment risk in the Spanish operations.
The Group has designated the carrying value of €34.0 million (2014: €34.0 million) foreign currency forward contracts held at the balance sheet date
as a net investment hedge of part of the Group’s investment in Euro denominated assets.
The change in the carrying amount of the derivatives which were effective hedging instruments and the change in the carrying value of the borrowings
offset the exchange movement on the foreign currency net investments and are presented in the translation reserve.
Foreign currency sensitivity
The Group is exposed to the Euro due to its Spanish operations only. The following table details how the Group’s income and equity would
increase/(decrease) on a before tax basis to a 10% change in the currency’s value against Sterling, and in accordance with IFRS 7, all other
variables remaining constant.
The 10% change represents a reasonably possible change in the specified Euro exchange rates in relation to Sterling.
£ million
Euro weakens against Sterling
Euro strengthens against Sterling
Income
sensitivity
2015
0.7
(0.7)
Equity
sensitivity
2015
(1.8)
1.8
Income
sensitivity
2014
0.5
(0.5)
Equity
sensitivity
2014
(2.1)
2.1
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Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
19. Financial instruments and fair value disclosures continued
Credit risk
Credit risk is the risk of financial loss where counterparties are not able to meet their obligations.
20. Retirement benefit obligations
Retirement benefit obligations comprise a defined benefit pension liability of £177.1 million (2014: £182.4 million) and a post-retirement healthcare
liability of £1.3 million (2014: £1.4 million).
Group policy is that surplus cash, when not used to repay borrowings, is placed on deposit with the Group’s main relationship banks and with other
banks or money market funds based on a minimum credit rating and maximum exposure.
The Group operates the Taylor Wimpey Pension Scheme (TWPS), a defined benefit pension scheme, which is closed to new members and future
accrual. The Group also operates defined contribution pension arrangements in the UK, which are available to new and existing UK employees.
Land receivables arise from sales of surplus land on deferred terms. A policy is in place such that, if the credit risk is not acceptable, then the deferred
payment must have adequate security, either by the use of an appropriate guarantee or a charge over the land. The fair value of any land held as
security is considered by management to be sufficient in relation to the carrying amount of the receivable to which it relates.
Trade and other receivables comprise mainly amounts receivable from various housing associations and other housebuilders. Management consider
that the credit quality of the various receivables is good in respect of the amounts outstanding and therefore credit risk is considered to be low. There
is no significant concentration of risk.
Mortgage receivables, including shared equity loans, are in connection with the various historical promotion schemes to support sales on a selective
basis. The mortgages are secured by a second charge over the property and are held at amortised cost. The non closely related embedded derivative
related to shared equity is held at fair value.
The carrying amount of financial assets, as detailed above, represents the Group’s maximum exposure to credit risk at the reporting date assuming that
any security held has no value. Details of guarantees and bonds are given in Note 27.
Liquidity risk
Liquidity risk is the risk that the Group does not have sufficient financial resources available to meet its obligations as they fall due. The Group manages
liquidity risk by continuously monitoring forecast and actual cash flows, matching the expected cash flow timings of financial assets and liabilities with
the use of cash and cash equivalents, borrowings, overdrafts and committed revolving credit facilities with a minimum of 12 months to maturity. Future
borrowing requirements are forecast on a monthly basis and funding headroom is maintained above forecast peak requirements to meet unforeseen
events. The Group has a range of maturities with an average life of four years (2014: 3.7 years). On 12 February 2015, the term of the revolving credit
facility was extended to February 2020.
Defined contribution pension plan
A defined contribution plan is a pension plan under which the Group pays contributions to an independently administered fund – such contributions
are based upon a fixed percentage of employees’ pay. The Group has no legal or constructive obligations to pay further contributions to the fund once
the contributions have been paid. Members’ benefits are determined by the amount of contributions paid by the Group and the member, together
with investment returns earned on the contributions arising from the performance of each individual’s chosen investments and the type of pension the
member chooses to buy at retirement. As a result, actuarial risk (that benefits will be lower than expected) and investment risk (that assets invested in
will not perform in line with expectations) fall on the employee.
The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent
that a cash refund or a reduction in the future payments is available.
The Group’s defined contribution plan, the Taylor Wimpey Personal Choice Plan (TWPCP), is offered to all new and existing monthly paid employees.
The People’s Pension is used for auto enrolment purposes for weekly and monthly employees not participating in the TWPCP. The People’s Pension
is provided by B&CE, one of the UK's largest providers of financial benefits to construction industry employers and individuals.
The Group made contributions to its defined contribution arrangements of £10.0 million in 2015 (2014: £9.0 million), which is included in the income
statement charge. The Group expects to make contributions of around £10.0 million in 2016.
Defined benefit pension schemes
The Group’s defined benefit pension scheme in the UK is the TWPS. The TWPS is a funded defined benefit pension scheme which provides benefits to
beneficiaries in the form of a guaranteed level of pension payable for life. The level of benefits provided depends on members’ length of service and their
salary in the final years leading up to retirement or date of ceasing active accrual if earlier. Pension payments are generally increased in line with inflation.
In addition to fixed term borrowings, the Group has access to committed revolving credit facilities and cash balances. At the balance sheet date, the
total unused committed amount was £550.0 million (2014: £550.0 million) and cash and cash equivalents were £323.3 million (2014: £212.8 million).
The Group operates the TWPS under the UK regulatory framework. Benefits are paid to members from a Trustee-administered fund and the Trustees
are responsible for ensuring that the scheme is sufficiently funded to meet current and future benefit payments. Scheme assets are held in trust.
The £100.0 million term loan matures in November 2020, with repayments commencing in November 2017.
The maturity profile of the anticipated future cash flows, including interest using the latest applicable relevant rate based on the earliest date on which
the Group can be required to pay financial liabilities on an undiscounted basis, is as follows:
Financial liabilities
£ million
On demand
Within one year
More than one year and less than two years
More than two years and less than five years
In more than five years
31 December 2015
* Excludes land creditors.
Financial liabilities
£ million
On demand
Within one year
More than one year and less than two years
More than two years and less than five years
In more than five years
31 December 2014
* Excludes land creditors.
Lease commitments are disclosed in Note 28.
Overdrafts,
bank and
other loans
–
5.0
29.8
82.0
–
116.8
Overdrafts,
bank and
other loans
–
4.9
4.9
85.7
26.1
121.6
Land
creditors
–
355.7
166.0
126.7
12.2
660.6
Land
creditors
–
237.5
162.9
90.0
23.7
514.1
Trade and
other
payables*
–
625.8
42.7
33.7
9.0
711.2
Trade and
other
payables*
–
600.3
37.7
30.3
2.6
670.9
Currency
forward
contracts
–
28.6
–
–
–
28.6
Currency
forward
contracts
–
46.5
–
–
–
46.5
Total
–
1,015.1
238.5
242.4
21.2
1,517.2
Total
–
889.2
205.5
206.0
52.4
1,353.1
The TWPS Trustees’ other duties include managing the investment of scheme assets, administration of scheme benefits and exercising of discretionary
powers. The Group works closely with the Trustees to manage the TWPS. The Trustees of the TWPS owe fiduciary duties to the TWPS’ beneficiaries.
The appointment of the Trustees is determined by the TWPS trust documentation.
The Trustees must agree a funding plan with the Group such that any funding shortfall is expected to be met by additional contributions and investment
outperformance. In order to assess the level of contributions required, triennial valuations are carried out using prudent assumptions. The first funding
valuation of the TWPS was performed during 2014, with a reference date of 31 December 2013. Subsequently, the Group agreed to make
contributions of £18.0 million in 2016. This includes £2.0 million in respect of administrative costs of the scheme.
In 2013, the Group introduced a £100.0 million Pension Funding Partnership utilising show homes, as well as five offices which are owned, in a sale
and leaseback structure. This provides an additional £5.1 million of annual funding for the TWPS. The assets held within this scheme do not affect the
IAS 19 figures as they remain assets of the Group, and are not assets of the TWPS. As at 31 December 2015, there was £91.1 million of property
and £19.9 million of cash held within the structure (2014: £93.8 million of property and £17.2 million of cash).
The Group continues to work closely with the Trustees in managing the pension exposure.
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www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
2015
Male
88
89
Female
90
92
2014
Male
88
89
Female
90
92
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
20. Retirement benefit obligations continued
The table below sets out the details of the funding valuations for the TWPS, carried out in September 2014, with reference to the position at 31
December 2013.
20. Retirement benefit obligations continued
The current life expectancies (in years) underlying the value of the accrued liabilities for the TWPS are:
Assumptions
RPI inflation
Discount rate – pre/post-retirement
General pay inflation
Real pension increases
Valuation results
Market value of assets
Past service liabilities
Scheme funding levels
Deficit repair contributions (per annum)
Period of payment
The defined benefit obligation is measured using the projected unit actuarial cost method.
TWPS
3.40%
6.05%/4.05%
n/a
0.00%
TWPS
£1,921m
£2,112m
91%
£16.0m
Until November 2018
Life expectancy
Member currently aged 65
Member currently aged 45
The pension liability is the difference between the scheme assets and liabilities. The liability is sensitive to the assumptions used. The table below shows
the impact to the liability of movement in key assumptions, measured using the same method as the defined benefit scheme.
Assumption
Discount rate
Rate of inflation*
Life expectancy
Change in assumption
Decrease by 0.1% p.a.
Increase by 0.1% p.a.
Members live 1 year longer
Impact on defined benefit
obligation
Increase by £32m
Increase by £28m
Increase by £63m
Impact on defined benefit
obligation (%)
1.5
1.4
3.0
* Assumed to affect deferred revaluation and pensioner increases in payment.
The sensitivity of increasing life expectancy has been reduced by a medically underwritten buy-in. See the section on additional areas of risk
management at the end of this note.
The duration, or average term to payment for the benefits due, weighted by liability, is approximately 15 years for the TWPS.
The fair value of the assets of the TWPS is set out below:
Accounting assumptions
The assumptions used in calculating the accounting costs and obligations of the TWPS, as detailed below, are set by the Directors after consultation
with independent, professionally qualified actuaries. The basis for these assumptions is prescribed by IAS 19 and they do not reflect the assumptions
that may be used in future funding valuations of the TWPS.
The discount rate used to determine the present value of the obligations is set by reference to market yields on high-quality corporate bonds with
regard for the duration of the TWPS. The assumption for RPI inflation is set by reference to the Bank of England’s implied inflation curve with regard
for the duration of the TWPS, with appropriate adjustments to reflect distortions due to supply and demand for inflation-linked securities. CPI inflation
is set by reference to RPI inflation as no CPI-linked bonds exist to render implied CPI inflation directly observable.
The life expectancies have been derived using mortality assumptions that were based on the results of a recent investigation into the mortality
experience of the scheme. The base tables used are the S2NXA tables with CMI_2013 improvements and 1.25% trend rate.
Accounting valuation assumptions
As at 31 December
Discount rate for scheme liabilities
General pay inflation
Deferred pension increases
Pension increases
TWPS
2015
2014
3.70%
n/a
1.95%
3.50%
n/a
1.70%
2.05%-3.55% 2.05%-3.55%
At 31 December 2015
Assets:
Equities
Corporate bonds
Fixed-index Government bonds
Index-linked Government bonds
Hedge funds
Property
Other assets(a)
Cash
Insurance policies in respect of certain members
At 31 December 2014
Assets:
Equities
Corporate bonds
Fixed-index Government bonds
Index-linked Government bonds
Property
Other assets(a)
Cash
Insurance policies in respect of certain members
(a) Consists of repurchase agreements and other financial derivatives (swaps, futures and forwards on equities and bonds).
There are no investments in respect of the Group’s own securities.
Percentage of
total scheme
assets held
£ million
753.0
470.3
467.8
542.0
118.4
45.6
(820.4)
76.8
235.6
1,889.1
793.6
484.6
261.9
547.1
107.4
23.2
(544.4)
88.0
242.4
2,003.8
39.9%
24.9%
24.8%
28.6%
6.2%
2.4%
(43.4)%
4.1%
12.5%
100.0%
39.6%
24.1%
13.1%
27.3%
5.4%
1.2%
(27.2%)
4.4%
12.1%
100.0%
124
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Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
20. Retirement benefit obligations continued
The table below details the movements in the pension liability and assets recorded through the income statement and other comprehensive income.
20. Retirement benefit obligations continued
The key risks of the defined benefit pension scheme are detailed below along with the Group’s approach to them.
£ million
At 1 January 2015
Current service cost
Administration expenses
Past service cost/settlements
Interest (expense)/income
Total amount recognised in income statement
Return on scheme assets not included in income statement
Change in demographic assumptions
Change in financial assumptions
Experience gains
Total remeasurements in other comprehensive income
Employer contributions
Employee contributions
Benefit payments
At 31 December 2015
£ million
At 1 January 2014
Current service cost
Administration expenses
Past service cost/settlements
Interest (expense)/income
Total amount recognised in income statement
Return on scheme assets not included in income statement
Change in demographic assumptions
Change in financial assumptions
Experience gains
Total remeasurements in other comprehensive income
Employer contributions
Employee contributions
Benefit payments
At 31 December 2014
Present value
of obligation
(2,186.2)
–
–
–
(74.3)
(74.3)
Fair value
of scheme
assets
2,003.8
–
(3.2)
–
68.3
65.1
Asset/(liability)
recognised on
balance sheet
(182.4)
–
(3.2)
–
(6.0)
(9.2)
–
–
49.2
14.7
63.9
–
–
130.4
(2,066.2)
Present value
of obligation
(2,035.2)
–
–
–
(91.1)
(91.1)
–
75.7
(251.2)
5.2
(170.3)
(72.5)
–
–
–
(72.5)
23.1
–
(130.4)
1,889.1
Fair value
of scheme
assets
1,853.0
–
(3.1)
–
83.6
80.5
144.4
–
–
–
144.4
–
–
110.4
(2,186.2)
36.3
–
(110.4)
2,003.8
(72.5)
–
49.2
14.7
(8.6)
23.1
–
–
(177.1)
Asset/(liability)
recognised on
balance sheet
(182.2)
–
(3.1)
–
(7.5)
(10.6)
144.4
75.7
(251.2)
5.2
(25.9)
36.3
–
–
(182.4)
Risk
Asset volatility
Description
The funding liabilities are calculated using a discount rate set with reference to government bond yields, with allowance for
additional return to be generated from the investment portfolio. The defined benefit obligation is calculated using a discount rate
set with reference to corporate bond yields. The TWPS holds a large proportion of its assets in equities and other return-seeking
assets. The returns on such assets tend to be volatile and are not correlated to government bonds or corporate bonds. This
means that the funding level is likely to be volatile in the short-term, potentially resulting in short-term cash requirements and an
increase in the net defined benefit liability recorded on the balance sheet. However, the Group believes that equities offer the best
returns over the long term with an acceptable level of risk. The TWPS’ assets are well-diversified by investing in a range of asset
classes, including property, government bonds and corporate bonds. There are a number of hedging strategies in place (these
are mentioned below). A summary of the target asset allocations of the TWPS, excluding hedging and insurance policies, is shown
below:
Liability matching assets
Equity
Alternative return-seeking assets
These target allocations were revised in September 2015.
TWPS
45.4%
6.8%
47.8%
Changes in
bond yields
Investing in
foreign currency
Asset/liability
mismatch
Illiquidity
Falling bond yields tend to increase the funding and accounting liabilities. However, the investment in corporate and government
bonds offers a degree of matching, i.e. the movement in assets arising from changes in bond yields partially matches the
movement in the funding or accounting liabilities. In this way, the exposure to movements in bond yields is reduced.
In order to maintain appropriate diversification of investments within the TWPS’ assets and to take advantage of overseas
investment returns, a proportion of the underlying investment portfolio is invested overseas. To balance the risk of investing in
foreign currencies while having an obligation to settle benefits in Sterling, a currency hedging programme, using forward foreign
exchange contracts, has been put in place to reduce the currency exposure of these overseas investments to the targeted level.
In order to maintain (and increase) the TWPS’ economic exposure to interest rates and inflation rates, a liability hedging
programme has been put in place. Repurchase agreements are being used to achieve the TWPS’ agreed target level of
liability hedging in an unfunded way and hence to reduce the investment risk of the TWPS’ assets relative to the liabilities.
Insurance policies and real estate make up £281.2 million (15%) of the asset portfolio of TWPS. Excluding these amounts
approximately 75% of assets are managed either in segregated accounts or daily/weekly dealt pooled funds and can therefore
be realised within a few business days under normal market conditions. Of the remaining investments a further 20% are in pooled
funds with monthly redemption dates. The remainder could be redeemed within approximately three months of notification in
normal market conditions.
Life expectancy The majority of the TWPS’ obligations are to provide a pension for the life of the member, so increases in life expectancy will
result in an increase in the TWPS’ liabilities. The inflation-linked nature of the benefit payments from the TWPS result increases
the sensitivity of the liabilities to changes in life expectancy.
Additional areas of risk management
During the last quarter of 2014, the Group reached agreement with Partnership Life Assurance Company Limited to insure the benefits of certain
members through a medically underwritten buy-in. These members represent the 10% of members with the greatest anticipated liability of the
scheme. By insuring these members, the Group has removed more than 10% of risk from the scheme by significantly reducing the longevity of a
large proportion of the liabilities. The Group remains ultimately liable for the payments, and as such the obligation is unchanged; however the medically
underwritten insurance policy has been recognised as a scheme insured asset.
During 2014, scheme deferred members were offered flexible retirement options under the scheme rules, which allowed participants to realise part
of their pension at an earlier date than previously anticipated. By discharging some liabilities at an earlier date, the actuarial risk attached to the scheme
has reduced.
Risks and risk management
The TWPS, in common with the majority of such defined benefit pension schemes in the UK, has a number of areas of risk. These areas of risk, and
the ways in which the Group has sought to manage them, are set out in the table on page 127.
The risks are considered from both a funding perspective, which drives the cash commitments of the Group, and from an accounting perspective,
i.e. the extent to which such risks affect the amounts recorded in the Group’s financial statements.
Although investment decisions in the UK are the responsibility of the Trustees, the Group takes an active interest to ensure that pension scheme risks
are managed efficiently. The Group has regular meetings with the Trustees to discuss investment performance, regulatory changes and proposals to
actively manage the deficit.
126
126
127
127
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
21. Provisions
£ million
At 1 January 2014
Additional provision in the year
Utilisation of provision
Released
At 31 December 2014
Additional provision in the year
Utilisation of provision
Released
At 31 December 2015
£ million
Current
Non-current
31 December
Housing
maintenance Restructuring
3.5
0.1
(2.5)
(0.1)
1.0
–
(0.4)
(0.3)
0.3
0.6
0.3
(0.1)
–
0.8
0.4
(0.3)
–
0.9
North America
disposal
11.8
–
–
–
11.8
–
–
–
11.8
Other
18.4
12.4
(2.8)
(0.2)
27.8
3.8
(8.2)
(2.4)
21.0
2015
31.1
2.9
34.0
Total
34.3
12.8
(5.4)
(0.3)
41.4
4.2
(8.9)
(2.7)
34.0
2014
40.4
1.0
41.4
Other provisions consist of a remedial work provision, provisions for legal claims, onerous leases and other contract-related costs. The remedial work
provision covers various obligations, including aftercare of Springfield Environmental Limited and our Oxley Woods development. Also included in other
provisions are amounts for legal claims and contract-related costs associated with various matters arising across the Group, the majority of which are
anticipated to be settled within a three year period. Onerous leases and vacant property costs included in this provision are expected to be utilised
within approximately five years.
22. Share capital
£ million
Authorised:
22,200,819,176 (2014: 22,200,819,176) ordinary shares of 1p each
1,158,299,201 (2014: 1,158,299,201) deferred ordinary shares of 24p each
Issued and fully paid:
31 December 2014
Ordinary shares issued in the year
31 December 2015
2015
2014
222.0
278.0
500.0
222.0
278.0
500.0
Number of shares
£ million
3,253,461,531
5,171,899
3,258,633,430
288.3
–
288.3
During the year the company issued an additional 5.2 million ordinary shares in order to satisfy option exercises.
During the year, options were exercised over 16,064,888 ordinary shares (2014: 24,463,017) the majority of which were met from our holding of shares
in our ESOTs at varying prices from nil pence to 90.0 pence per share. Under the Group’s executive share option plans, employees held options at
31 December 2015 to purchase up to 153,600 shares, subject to achievement of performance tests (2014: 455,865) at a price of 39.34 pence per
share nominally exercisable up to 7 August 2022. Under the Group’s performance share plan, employees held conditional awards at 31 December
2015 in respect of up to 17,119,676 shares, subject to achievement of performance tests (2014: 16,706,261) at nil pence per share nominally
exercisable up to 3 September 2018.
Under the Group’s savings-related share option schemes, employees held options at 31 December 2015 to purchase 22,590,040 shares
(2014: 27,313,874) at prices between 22.88 pence and 159.12 pence per share exercisable up to 31 May 2021. Under the Group’s share
purchase plan, employees held conditional awards at 31 December 2015 in respect of 5,830,072 shares (2014: 6,356,595) at nil pence per share.
Under a financing agreement signed in April 2009, the Company agreed to issue 57.9 million warrants giving the holders the right to subscribe to an
equivalent number of ordinary shares in Taylor Wimpey plc. The warrants were priced at 17.4473p per share. In May 2014 these warrants expired
meaning the remaining unexercised warrants (1.1 million) lapsed.
23. Share premium account
£ million
At 1 January
Share warrants exercised
At 31 December
24. Reserves
£ million
Balance at 1 January 2014
Share-based payment credit
Cash cost of satisfying share options
Actuarial loss on defined benefit pension schemes
Deferred tax credit on defined benefit movement
Exchange differences on translation of foreign operations
Movement in fair value of hedging derivatives and loans
Transfer to retained earnings
Dividends approved and paid
Profit for the year
Balance at 31 December 2014
Share-based payment credit
Tax credit on items taken directly to statement of changes in equity
Cash cost of satisfying share options
Actuarial loss on defined benefit pension schemes
Deferred tax charge on defined benefit movement
Exchange differences on translation of foreign operations
Movement in fair value of hedging derivatives and loans
Dividends approved and paid
Profit for the year
Balance at 31 December 2015
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
2015
762.9
–
762.9
2014
760.2
2.7
762.9
Other
6.8
–
–
–
–
–
–
(1.9)
–
–
4.9
–
–
–
–
–
–
–
–
–
4.9
Total other
reserves
43.8
–
–
–
–
(1.8)
1.8
(1.9)
–
–
41.9
–
–
–
–
–
(1.5)
1.5
–
–
41.9
Retained
earnings
1,177.5
6.2
(14.7)
(25.9)
5.2
–
–
1.9
(72.7)
374.4
1,451.9
7.3
8.3
(7.2)
(8.6)
(0.7)
–
–
(308.4)
490.1
1,632.7
Capital
redemption
reserve
31.5
–
–
–
–
–
–
–
–
–
31.5
–
–
–
–
–
–
–
–
–
31.5
Translation
reserve
5.5
–
–
–
–
(1.8)
1.8
–
–
–
5.5
–
–
–
–
–
(1.5)
1.5
–
–
5.5
Other reserves
Capital redemption reserve
The capital redemption reserve arose on the historical redemption of Parent Company shares, and is not distributable.
Translation reserve
The translation reserve consists of exchange differences arising on the translation of overseas operations. It also includes changes in fair values
of hedging derivatives where such instruments are designated and effective as hedges of investment in overseas operations.
Other reserve
The Group issued 57.9 million of warrants with a fair value of £5.5 million in 2009 as part of its debt refinancing agreement. The full cost of the warrants
was recognised in the other reserve on their issuance.
128
128
129
129
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
25. Own shares
£ million
Balance at 1 January 2014
Shares acquired
Disposed of on exercise of options
Balance at 31 December 2014
Shares acquired
Disposed of on exercise of options
Balance at 31 December 2015
18.9
10.0
(18.1)
10.8
2.0
(9.6)
3.2
The own shares reserve represents the cost of shares in Taylor Wimpey plc purchased in the market, those held as treasury shares and those held by
the Taylor Wimpey Employee Share Ownership Trusts to satisfy options and conditional share awards under the Group’s share plans.
Ordinary shares held in trust for bonus, option and performance award plans
2015
Number
4.3m
2014
Number
14.3m
Employee Share Ownership Trusts (ESOTs) are used to hold the Company’s shares which have been acquired on the market. These shares are
used to meet the valid exercise of options and/or vesting of conditional awards and/or award of shares under the Executive Incentive Scheme, Bonus
Deferral Plan, Performance Share Plan, Executive Share Option Scheme, Savings-Related Share Option Scheme and the matching award of shares
under the Share Purchase Plan.
During the year, Taylor Wimpey plc purchased £2.0 million of its own shares which are held in the ESOTs (2014: £10.0 million).
The ESOTs’ entire holding of shares at 31 December 2015, aggregating 4.3 million shares (2014: 14.3 million), was covered by outstanding options
and conditional awards over shares at that date.
26. Notes to the cash flow statement
£ million
Profit on ordinary activities before finance costs
Adjustments for:
Depreciation of buildings, plant and equipment
Net addition/(reversal) of inventory write-downs
Amortisation of software development
Pension contributions in excess of charge to the income statement
Share-based payment charge
Profit on disposal of property and plant
(Decrease)/increase in provisions
Operating cash flows before movements in working capital
Increase in inventories
Decrease in receivables
Increase in payables
Cash generated by operations
Income taxes (paid)/received
Interest paid
Net cash from operating activities
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www.taylorwimpey.co.uk
2015
631.5
2.0
0.6
1.3
(19.9)
7.3
(0.5)
(7.4)
614.9
(269.1)
13.0
68.1
426.9
(5.5)
(14.5)
406.9
2014
496.8
1.2
(18.7)
1.7
(33.2)
6.2
(0.4)
7.1
460.7
(409.1)
20.6
135.0
207.2
0.1
(14.6)
192.7
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short
term highly liquid investments with an original maturity of three months or less.
Movement in net cash/(debt)
£ million
Balance 1 January 2014
Cash flow
Foreign exchange
Balance 31 December 2014
Cash flow
Foreign exchange
Balance 31 December 2015
Cash and
cash
equivalents
105.4
106.1
1.3
212.8
109.5
1.0
323.3
Overdrafts,
banks and
other loans
(100.0)
–
–
(100.0)
–
–
(100.0)
Debenture
loans
(debt)/cash
–
–
–
–
–
–
–
Total net
5.4
106.1
1.3
112.8
109.5
1.0
223.3
27. Contingent liabilities and capital commitments
General
The Group in the normal course of business has given guarantees and entered into counter-indemnities in respect of bonds relating to the Group’s
own contracts and given guarantees in respect of the Group’s share of certain contractual obligations of joint ventures.
The Group has entered into counter-indemnities in the normal course of business in respect of performance bonds.
Provision is made for the Directors’ best estimate of all known legal claims and all legal actions in progress. The Group takes legal advice as to the
likelihood of success of claims and actions and no provision is made where the Directors consider, based on that advice, that the action is unlikely
to succeed or a sufficiently reliable estimate of the potential obligation cannot be made.
The Group has no material capital commitments as at 31 December 2015 (2014: none).
130
130
131
131
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
28. Operating lease arrangements
The Group as lessee
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases for
offices and equipment, which fall due as follows:
£ million
Within one year
In more than one year but not more than five years
After five years
2015
5.6
9.6
0.8
16.0
2014
7.6
12.6
1.3
21.5
29.Share-based payments
Equity-settled share option plan
Details of all equity-settled share-based payment arrangements in existence during the year are set out in the Remuneration Report on pages 68 to 85.
Schemes requiring consideration from participants:
Outstanding at beginning of year
Granted during the year
Lapsed during the year
Exercised during the year
Cancellations during the year
Outstanding at the end of the year
Exercisable at the end of the year
2015
2014
Weighted
average
exercise
price
Options
(in £)
0.46 40,984,508
8,106,951
1.59
(1,539,724)
0.23
0.30 (13,425,401)
–
0.87
0.76 34,126,334
6,308,736
0.37
Weighted
average
exercise
price
(in £)
0.38
0.80
0.53
0.23
–
0.46
0.12
Options
34,126,334
5,310,398
(1,455,884)
(8,928,412)
(478,724)
28,573,712
5,405,996
The table above includes shares which are granted to employees on a matching basis. When the employee joins the scheme, purchased shares are
matched on a 1:1 basis. 5,830,072 of these awards, which do not expire, were in issue at 31 December 2015 (2014: 6,356,595). The remaining
options outstanding at 31 December 2015 had a range of exercise prices from £0.23 to £1.59 (2014: £0.23 to £0.90) and a weighted average
remaining contractual life of 1.14 years (2014: 1.3 years).
Schemes not requiring consideration from participants:
Outstanding at beginning of year
Granted during the year
Lapsed during the year
Exercised during the year
Cancellations during the year
Outstanding at the end of the year
Exercisable at the end of the year
2015
2014
Weighted
average
exercise
price
(in £)
Options
– 25,183,282
4,329,016
–
(1,768,421)
–
– (11,037,616)
–
–
– 16,706,261
–
–
Weighted
average
exercise
price
(in £)
–
–
–
–
–
–
–
Options
16,706,261
8,112,869
(562,978)
(7,136,476)
–
17,119,676
–
These conditional awards outstanding at 31 December 2015 had a weighted average remaining contractual life of 1.9 years (2014: 1.5 years).
The weighted average share price at the date of exercise across all options exercised during the period was £1.53 (2014: £1.20).
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www.taylorwimpey.co.uk
29.Share-based payments continued
For share plans with no market conditions granted during the current and preceding year, the fair value of the awards at the grant date was determined
using the Binomial model. The inputs into that model were as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
Expected dividend yield
2015
£1.74
£0.83
28%
3/5 years
0.9%
6.0%
2014
£1.17
£0.67
34%
3/5 years
1.5%
5.7%
The weighted average fair value of share awards granted during the year is £0.27 (2014: £0.52).
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the expected term.
For share awards with market conditions granted during the current year, the fair value of the awards was determined using the Monte Carlo
simulation model. The inputs into that model were as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
Expected dividend yield
2015
£1.48
Nil
32%
0.8/3 years
0.9%
0.0%
2014
£1.25
Nil
34%
3 years
0.8%
0.0%
The weighted average fair value of share options granted during the year is £0.91 (2014: £0.79).
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the expected term. The expected life used in
the model is based on historical exercise patterns.
The Group recognised a total expense of £7.3 million related to equity-settled share-based payment transactions in 2015 (2014: £6.2 million).
30. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in
this note. The pension schemes of the Group are related parties. Arrangements between the Group and its pension schemes are disclosed in Note 20.
Transactions between the Group and its joint ventures are disclosed below. The Group has loans with joint ventures that are detailed in Note 13.
On 1 November 2014, the Chief Executive was appointed as a non executive director of Travis Perkins plc. During the year, the Group directly
purchased from Travis Perkins plc goods to the value of £17.6 million (2014: £14.7 million). In addition, indirect purchases through sub-contractors
amounted to £17.3 million (2014: £10.4 million). Any residual purchases made at a local level are not material to either party. All transactions were
completed on an arms-length basis.
The Chief Executive purchased a property for €484,500 on one of the Group’s Spanish developments under the staff discount scheme. The property
was sold on the same terms available to all employees pursuant to the Companies Staff House purchase scheme and the transaction was approved
by Shareholders at the Company’s 2015 Annual General Meeting, in accordance with S.190 and S.191 of the Companies Act 2006 which relate to
substantial property transactions between directors and companies.
Trading transactions
During the year, Group companies’ purchases from joint ventures totalled £nil (2014: £nil) and sales to joint ventures totalled £19.8 million
(2014: £12.2 million).
132
132
133
133
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Consolidated Financial Statements continued
30. Related party transactions continued
Remuneration of key management personnel
The key management personnel of the Group are the members of the Group Management Team (GMT) as presented on page 14. The remuneration
information for the three Executive Directors is set out in the Remuneration Report on page 79. The aggregate compensation for the other seven
(2014: five) members of the GMT is as follows:
£000
Short term employee benefits
Post-employment benefits
Other long term benefits
Termination benefits
Total (excluding share based payments charge)
2015
3,744
330
–
221
4,295
2014
2,697
249
–
153
3,099
During the year Jennie Daly replaced Peter Andrew as Land Director, Nigel Holland and Chris Carney were appointed as Divisional Chairmen of the
Central and South West division and the London and South East division respectively. Peter Truscott, former South Divisional Chairman left the Group
to join Galliford Try as their Chief Executive. A final, additional appointment to the GMT was Lee Bishop as Director of our Major Developments division.
In addition to the amounts above, a share-based payments charge of £851,900 (2014: £349,000) related to share options held by members of
the GMT.
31. Dividends
£ million
Proposed
Interim dividend 2015 0.49p (2014: 0.24p) per ordinary share of 1p each
Final dividend 2015 1.18p (2014: 1.32p) per ordinary share of 1p each
Amounts recognised as distributions to equity holders
Paid
Final dividend 2014 1.32p (2013: 0.47p) per ordinary share of 1p each
Interim dividend 2015 0.49p (2014: 0.24p) per ordinary share of 1p each
Special dividend 2015 7.68p (2014: 1.54p) per ordinary share of 1p each
2015
2014
15.9
38.6
54.5
42.9
15.9
249.6
308.4
7.8
42.9
50.7
15.2
7.8
49.7
72.7
The Directors recommend a final dividend for the year ended 31 December 2015 of 1.18 pence per share subject to shareholder approval at the
Annual General Meeting, with an equivalent final dividend charge of £38.6 million (2014: £42.9 million). The final dividend will be paid on 20 May 2016
to all shareholders registered at the close of business on 8 April 2016.
The Directors additionally recommend a special dividend of c.£300.0 million (2014: c.£250.0 million) subject to shareholder approval at the Annual
General Meeting. The special dividend will be paid on 15 July 2016 to all shareholders registered at the close of business on 3 June 2016.
In accordance with IAS 10 ‘Events after the balance sheet date’ the proposed final or special dividends have not been accrued as a liability as
at 31 December 2015.
Company Balance Sheet
at 31 December 2015
£ million
Non-current assets
Investments in Group undertakings
Trade and other receivables
Deferred tax
Current assets
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Net current assets
Total assets less current liabilities
Non-current liabilities
Bank and other loans
Provisions
Net assets
Equity
Share capital
Share premium account
Own shares
Other reserves
Retained earnings
Total Equity
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Note
2015
4
5
5
6
7
8
9
10
11
12
2,447.4
4.6
1.0
2,453.0
2,621.8
306.1
2,927.9
(1,684.9)
(1,684.9)
1,243.0
3,696.0
(100.0)
(0.7)
3,595.3
288.3
762.9
(3.2)
36.0
2,511.3
3,595.3
Restated
2014
2,440.1
4.3
2.7
2,447.1
2,595.9
192.6
2,788.5
(1,676.8)
(1,676.8)
1,111.7
3,558.8
(100.0)
(1.3)
3,457.5
288.3
762.9
(10.8)
34.5
2,382.6
3,457.5
As permitted by Section 408 of the Companies Act 2006, Taylor Wimpey plc has not presented its own income statement. The profit of the Company
for the financial year was £436.6 million (2014: £1,123.5 million).
The financial statements were approved by the Board of Directors and authorised for issue on 29 February 2016. They were signed on its behalf by:
P Redfern
Director
R Mangold
Director
134
134
135
135
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Company Statement of Changes in Equity
for the year to 31 December 2015
Notes to the Company Financial Statements
for the year to 31 December 2015
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
For the year to 31 December 2015
£ million
Balance as at 1 January 2015
Movement in fair value of hedging derivatives and loans
Other comprehensive income for the year net of tax
Profit for the year
Total comprehensive income for the year
New share capital subscribed
Own shares acquired
Utilisation of own shares
Cash cost of satisfying share options
Capital contribution on share-based payments
Dividends approved and paid
Total equity
For the year to 31 December 2014 (restated)
£ million
Balance as at 1 January 2014
Movement in fair value of hedging derivatives and loans
Other comprehensive income for the year net of tax
Profit for the year
Total comprehensive income for the year
New share capital subscribed
Own shares acquired
Utilisation of own shares
Cash cost of satisfying share options
Capital contribution on share-based payments
Dividends approved and paid
Total equity
Share
capital
288.3
–
–
–
–
–
–
–
–
–
–
288.3
Share
capital
288.1
–
–
–
–
0.2
–
–
–
–
–
288.3
Share
premium
762.9
–
–
–
–
–
–
–
–
–
–
762.9
Share
premium
760.2
–
–
–
–
2.7
–
–
–
–
–
762.9
Own
shares
(10.8)
–
–
–
–
–
(2.0)
9.6
–
–
–
(3.2)
Own
shares
(18.9)
–
–
–
–
–
(10.0)
18.1
–
–
–
(10.8)
Other
reserves
34.5
1.5
1.5
–
1.5
–
–
–
–
–
–
36.0
Other
reserves
32.7
1.8
1.8
–
1.8
–
–
–
–
–
–
34.5
Retained
earnings
2,382.6
–
–
436.6
436.6
–
–
–
(6.8)
7.3
(308.4)
2,511.3
Retained
earnings
1,339.5
–
–
1,123.5
1,123.5
–
–
–
(13.9)
6.2
(72.7)
2,382.6
Total
3,457.5
1.5
1.5
436.6
438.1
–
(2.0)
9.6
(6.8)
7.3
(308.4)
3,595.3
Total
2,401.6
1.8
1.8
1,123.5
1,125.3
2.9
(10.0)
18.1
(13.9)
6.2
(72.7)
3,457.5
1. Significant accounting policies
The following accounting policies have been used consistently, unless
otherwise stated, in dealing with items which are considered material.
Basis of preparation
The Company meets the definition of a qualifying entity under FRS 101
(Financial Reporting Standard 101) issued by the Financial Reporting
Council. Accordingly, in the year ended 31 December 2015 the Company
has changed its accounting framework from the pre-2015 UK GAAP to
FRS 101 and has, in doing so, applied the requirements of IFRS 1.6.33
and related appendices. These financial statements were prepared in
accordance with FRS 101 ‘Reduced Disclosure Framework’ as issued
by the Financial Reporting Council.
The prior year financial statements were restated for adoption of
FRS 101 in the current year. There were no material adjustments
to Total Comprehensive Income or Equity on restatement.
As permitted by FRS 101, the Company has taken advantage of the
disclosure exemptions available under that standard in relation to share-
based payments, financial instruments, capital management, presentation
of comparative information in respect of certain assets, presentation of
a cash flow statement, standards not yet effective, impairment of assets
and related party transactions. As the Company is a qualifying entity it has
also applied the exemption from the requirement of IFRS 1 to present an
opening statement of financial position.
The principal accounting policies adopted are set out below.
Going concern
The Group has prepared forecasts, including certain sensitivities
taking into account the principal risks identified on pages 34 to 37.
Having considered these forecasts, the Directors remain of the view that
the Group’s financing arrangements and capital structure provide both
the necessary facilities and covenant headroom to enable the Group
to conduct its business for at least the next 12 months.
Accordingly, the Company financial statements have been prepared on
a going concern basis.
Investments in Group undertakings
Investments are included in the balance sheet at cost less any provision
for impairment. The Company assesses investments for impairment
whenever events or changes in circumstances indicate that the carrying
value of an investment may not be recoverable. If any such indication of
impairment exists, the Company makes an estimate of the recoverable
amount of the investment. If the recoverable amount is less than the value
of the investment, the investment is considered to be impaired and is
written down to its recoverable amount. An impairment loss is expensed
immediately; if the impairment is not considered to be a permanent
diminution in value, it may reverse in a future period to the extent it
is no longer considered necessary.
The Company values its investments in subsidiary holding companies
based on a comparison between the net assets recoverable by the
subsidiary company and the investment held. Where the net assets
are lower than the investment an impairment is recorded. For trading
subsidiaries, the investment carrying value in the Company is assessed
against the net present value of the discounted cash flows from
the subsidiary.
Borrowing costs
Capitalised finance costs are held in other receivables and amortised
over the period of the facility.
Taxation
The tax charge represents the sum of the tax currently payable and
deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from profit before tax because it excludes items of income
or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible.
The Company’s liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the balance sheet date.
Any liability or credit in respect of Group relief in lieu of current tax is
also calculated using corporation tax rates that have been enacted or
substantively enacted by the balance sheet date unless a different
rate (including a nil rate) has been agreed within the Group.
Deferred tax
Deferred tax is provided in full on temporary differences that result in an
obligation at the balance sheet date to pay more tax, or a right to pay
less tax, at a future date, at rates expected to apply when they crystallise
based on current tax rates and law.
Deferred tax assets are recognised to the extent that it is regarded
as more likely than not that they will be recovered.
Deferred tax is measured on a non-discounted basis using the tax rates
and laws that have been enacted or substantively enacted at the balance
sheet date.
Foreign currencies
Transactions denominated in foreign currencies are recorded in Sterling
at actual rates as of the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the year end are reported
at the rates of exchange prevailing at the year end.
Any gain or loss arising from a change in exchange rates subsequent
to the date of the transaction is included as an exchange gain or loss in
profit and loss. Unrealised exchange differences on intercompany long
term loans and foreign currency borrowings, to the extent that they
hedge the Company’s investment in overseas investments, are taken
to the translation reserve.
Derivative financial instruments and hedge accounting
The Company uses foreign currency borrowings and currency swaps
to hedge its investment in overseas operations. Changes in the fair value
of derivative financial instruments that are designated and effective as
hedges of investment in overseas operations are recognised directly
in other comprehensive income and the ineffective portion, if any, is
recognised immediately in the income statement. The hedged items
are adjusted for changes in exchange rates, with gains or losses from
remeasuring the carrying amount being recognised directly in other
comprehensive income.
Share-based payments
The Company issues equity-settled share-based payments to certain
employees of its subsidiaries. Equity-settled share-based payments are
measured at fair value at the grant date. The fair value is expensed on
a straight-line basis over the vesting period, based on the estimate of
shares that will eventually vest. The cost of equity-settled share-based
payments granted to employees of subsidiary companies is borne by
the employing company, without recharge. As such the Company’s
investment in the subsidiary is increased by an equivalent amount.
136
136
137
137
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Company Financial Statements continued
1. Significant accounting policies continued
Provisions
Provisions are recognised at the Directors’ best estimate when the Company has a present obligation as a result of a past event and it is probable
that the Company will have to settle the obligation.
Own shares
The cost of the Company’s investment in its own shares, which comprise shares held in treasury by the Company and shares held by employee
benefit trusts for the purpose of funding certain of the Company’s share option plans, is shown as a reduction in shareholders’ equity.
Dividends paid
Dividends are charged to the Company’s retained earnings reserve in the period of payment in respect of an interim dividend, and in the period in
which shareholders’ approval is obtained in respect of the Company’s final dividend.
2. Particulars of employees
Directors
2015
Number
3
2014
Number
3
The Executive Directors received all of their remuneration, as disclosed in the Remuneration Report on pages 68 to 85, from Taylor Wimpey UK
Limited. This remuneration is reflective of the Directors’ service to the Company and all its subsidiaries.
3. Auditor’s remuneration
£ million
Total audit fees
Other services
Tax services
Total non-audit fees
A description of other services is included in Note 6 on page 110 to the Group financial statements.
4. Investments in Group undertakings
£ million
Cost
1 January 2015
Capital contribution relating to share based payments
31 December 2015
Provision for impairment
1 January 2015
Release for the year
31 December 2015
Carrying amount
31 December 2015
31 December 2014
All investments are unlisted and information about all subsidiaries is listed on pages 142 to 145.
2015
0.1
–
–
–
0.1
2014
0.1
–
–
–
0.1
Shares
Loans
Total
5,251.4
7.3
5,258.7
2,811.3
–
2,811.3
2,447.4
2,440.1
–
–
–
–
–
–
–
–
5,251.4
7.3
5,258.7
2,811.3
–
2,811.3
2,447.4
2,440.1
5. Trade and other receivables
£ million
Amounts falling due within one year:
Due from Group undertakings
Other receivables
Amounts falling due in over one year:
Other receivables
Deferred tax
6. Trade and other payables: amounts falling due within one year
£ million
Due to Group undertakings
Other payables
Corporation tax creditor
7. Bank and other loans: amounts falling due after one year
£ million
Other loans
Other loans are repayable as follows:
Amounts due for settlement after one year
Other loans comprise a £100.0 million (2014: £100.0 million) variable rate term loan with an investment fund.
8. Share capital
£ million
Authorised:
22,200,819,176 (2014: 22,200,819,176) ordinary shares of 1p each
1,158,299,201 (2014: 1,158,299,201) deferred ordinary shares of 24p each
Issued and fully paid:
31 December 2014
Ordinary shares issued in the year
31 December 2015
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
2015
2014
2,620.4
1.4
2,621.8
2,594.2
1.7
2,595.9
4.6
1.0
5.6
2015
1,682.8
1.7
0.4
1,684.9
2015
100.0
100.0
100.0
100.0
4.3
2.7
7.0
2014
1,674.9
1.5
0.4
1,676.8
2014
100.0
100.0
100.0
100.0
2015
2014
222.0
278.0
500.0
222.0
278.0
500.0
Number of shares
£ million
3,253,461,531
5,171,899
3,258,633,430
288.3
–
288.3
138
138
139
139
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
14. Contingent liabilities
The Company has, in the normal course of business, given guarantees and entered into counter-indemnities in respect of bonds relating to the Group’s
own contracts.
Provision is made for the Directors’ best estimate of known legal claims and legal actions in progress. The Group takes legal advice as to the likelihood
of success of claims and actions and no provision is made where the Directors consider, based on that advice, the action is unlikely to succeed or
a sufficiently reliable estimate of the potential obligation cannot be made.
The Company issued a guarantee in respect of the TWPS, which had a deficit under IAS 19 of £177.1 million at 31 December 2015. The guarantee
commits the Company to ensure that the participating subsidiaries make deficit repair contributions in accordance with a schedule agreed with
the Trustees during the year of £16.0 million per annum.
15. Dividend
£ million
Proposed
Interim dividend 2015 0.49p (2014: 0.24p) per ordinary share of 1p each
Final dividend 2015 1.18p (2014: 1.32p) per ordinary share of 1p each
Amounts recognised as distributions to equity holders
Paid
Final dividend 2014 1.32p (2013: 0.47p) per ordinary share of 1p each
Interim dividend 2015 0.49p (2014: 0.24p) per ordinary share of 1p each
Special dividend 2015 7.68p (2014: 1.54p) per ordinary share of 1p each
2015
2014
15.9
38.6
54.5
42.9
15.9
249.6
308.4
7.8
42.9
50.7
15.2
7.8
49.7
72.7
The Directors recommend a final dividend for the year ended 31 December 2015 of 1.18 pence per share (2014: 1.32 pence per share) subject to
shareholder approval at the Annual General Meeting, with an equivalent final dividend charge of £38.6 million (2014: £42.9 million). The final dividend
will be paid on 20 May 2016 to all shareholders registered at the close of business on 8 April 2016.
The Directors additionally recommend a special dividend of c.£300.0 million (2014: c.£250.0 million) subject to shareholder approval at the Annual
General Meeting. The special dividend will be paid on 15 July 2016 to all shareholders registered at the close of business on 3 June 2016.
In accordance with IAS 10 ‘Events after the balance sheet date’, the proposed final or special dividends have not been accrued as a liability
as at 31 December 2015.
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Notes to the Company Financial Statements continued
8. Share capital continued
During the year, options were exercised over 16,064,888 ordinary shares (2014: 24,463,017) all of which were met from our holding of shares in
our ESOTs at varying prices from nil pence to 90.0 pence per share. Under the Group’s executive share option plans, employees held options at
31 December 2015 to purchase up to 153,600 shares, subject to achievement of performance tests (2014: 455,865) at a price of 39.34 pence per
share nominally exercisable up to 7 August 2022. Under the Group’s performance share plan, employees held conditional awards at 31 December
2015 in respect of up to 17,119,676 shares, subject to achievement of performance tests (2014: 16,706,261) at nil pence per share nominally
exercisable up to 3 September 2018.
Under the Group’s savings-related share option schemes, employees held options at 31 December 2015 to purchase 22,590,040 shares
(2014: 27,313,874) at prices between 22.88 pence and 159.12 pence per share exercisable up to 31 May 2021. Under the Group’s share
purchase plan, employees held conditional awards at 31 December 2015 in respect of 5,830,072 shares (2014: 6,356,595) at nil pence per share.
Under a financing agreement signed in April 2009, the Company agreed to issue 57.9 million warrants giving the holders the right to subscribe to an
equivalent number of ordinary shares in Taylor Wimpey plc. The warrants were priced at 17.4473p per share. In May 2014 these warrants expired
meaning the remaining unexercised warrants (1.1 million) lapsed.
9. Share premium account
£ million
At 1 January
Share warrants exercised
At 31 December
10. Own shares
£ million
Own shares
These comprise ordinary shares of the Company:
Shares held in trust for bonus, options and performance award plans
2015
762.9
–
762.9
2015
3.2
2014
760.2
2.7
762.9
2014
10.8
Number
4.3m
Number
14.3m
The market value of the shares at 31 December 2015 was £8.7 million (2014: £19.7 million) and their nominal value was £0.04 million
(2014: £0.14 million).
Dividends on these shares have been waived except for 0.01p per share in respect of the shares held in trust.
Employee Share Ownership Trusts (ESOTs) are used to hold the Company’s shares which have been acquired on the market. These shares are used
to meet the valid exercise of options and/or vesting of conditional awards and/or award of shares under the Executive Incentive Scheme Bonus Deferral
Plan, Performance Share Plan, Executive Share Option Scheme, Savings-Related Share Option Scheme and the matching award of shares under the
Share Purchase Plan.
During the year, Taylor Wimpey plc purchased £2.0 million of its own shares which are held in the ESOTs (2014: £10.0 million).
The ESOTs’ entire holding of shares at 31 December 2015, aggregating 4.3 million shares (2014: 14.3 million), was covered by outstanding options
and conditional awards over shares at that date.
11. Other reserves
£ million
At 31 December
2015
36.0
(Restated)
2014
34.5
Other reserves includes £31.5 million (2014: £31.5 million) in respect of the historical redemption of Parent Company shares which is non distributable
and £4.5 million in respect of fair value gains on forward exchange contracts (2014: £3.0 million).
12. Retained earnings
Retained earnings of £2,511.3 million (restated 2014: £2,382.6 million) includes profit for the year, dividends received from subsidiaries of £350.0 million
(2014: £250.0 million) and reversal of previous impairments of £nil (2014: £810.4 million). Included in retained earnings is £563.1 million (2014: £499.6
million) which is not distributable.
13. Share-based payments
Details of share awards granted by the Company to employees of subsidiaries, and that remain outstanding at the year-end over the Company’s
shares, are set out in Note 29 to the Group financial statements. The Company did not recognise any expense related to equity-settled share-based
payment transactions in the current or preceding year.
140
140
141
141
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Particulars of Subsidiaries, Associates and Joint Ventures
Country of incorporation
and principal operations
United Kingdom
Taylor Wimpey plc interest is 100% in the issued
ordinary share capital of these undertakings
included in the consolidated accounts
Taylor Wimpey Holdings Limited
Activity
Holding company
United Kingdom
George Wimpey Limited
Holding company
Registered office
Gate House, Turnpike Road, High Wycombe,
Buckinghamshire, HP12 3NR
Gate House, Turnpike Road, High Wycombe,
Buckinghamshire, HP12 3NR
United Kingdom
Taylor Wimpey UK Limited(a)
United Kingdom housebuilder Gate House, Turnpike Road, High Wycombe,
United Kingdom
Taylor Wimpey Developments Limited(a) Holding company
Spain
Taylor Wimpey de España S.A.U.(a)(b)
Spanish housebuilder
(a)
Interests held by subsidiary undertakings.
(b) 9% cumulative, redeemable preference shares are additionally held.
Buckinghamshire, HP12 3NR
Gate House, Turnpike Road, High Wycombe,
Buckinghamshire, HP12 3NR
Aragon, 223 223A, 07008, Palma de Mallorca,
Baleares, Spain
The entries listed below are companies incorporated in the United Kingdom and registered in England & Wales and the registered office is Gate House,
Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR unless otherwise stated. All of the below are 100% subsidiaries of Group companies
and only have ordinary share capital unless otherwise stated.
Admiral Developments Limited
Admiral Homes (Eastern) Limited
Admiral Homes Limited
Ashfield Investments Limited
Ashton Park Limited
Banorgrove Limited
BGS (Pentian Green) Holdings Limited
Bracken Homes Limited
Bryad Developments Limited
Bryant Country Homes Limited
Bryant Group Services Limited
Bryant Homes Central Limited
Bryant Homes East Midlands Limited
Bryant Homes Limited
Bryant Homes North East Limited
Bryant Homes Northern Limited
Bryant Homes South West Limited
Bryant Homes Southern Limited
Bryant Properties Developments Limited
Bryant Properties Limited
Canberra (Southern) Limited
Canberra Investment Co. Limited
Candlemakers (TW) Limited
Clipper Investments Limited
Compine Developments (Wootton) Limited
Corney Reach Limited
Cross Point Land Limited
Dormant Nominees One Limited
Dormant Nominees Two Limited
Egerton Construction Co. Limited
Egerton Contracts Limited
Ettingshall Developments Limited
Farrods Water Engineers Limited
Flyover House Limited
Foray Properties Limited
George Wimpey Bristol Limited
George Wimpey City 2 Limited
George Wimpey City Limited
George Wimpey East Anglia Limited
George Wimpey East London Limited
142
142
George Wimpey East Midlands Limited
George Wimpey Manchester Limited
George Wimpey Midland Limited
George Wimpey North East Limited
George Wimpey North London Limited
George Wimpey North Midlands Limited
George Wimpey North West Limited
George Wimpey North Yorkshire Limited
George Wimpey Pension Trustees Limited
George Wimpey South East Limited
George Wimpey South Midlands Limited
George Wimpey South West Limited
George Wimpey South Yorkshire Limited
George Wimpey Southern Counties Limited
George Wimpey West London Limited
George Wimpey West Midlands Limited
George Wimpey West Yorkshire Limited
Globe Road Limited
Gotheridge & Sanders Limited
Grand Union Vision Limited
Groveside Homes Limited
Hamme Construction Limited
Hanger Lane Holdings Limited
Harrock Limited
Hassall Homes (Cheshire) Limited
Hassall Homes (Mercia) Limited
Hassall Homes (Southern) Limited
Hassall Homes (Wessex) Limited
IVA (Midlands) Limited
Jim 1 Limited
Jim 2 Limited
Jim 3 Limited
Jim 4 Limited
Jim 5 Limited
L. & A. Freeman Limited
Laing Homes Limited
Laing Land Limited
Land Trust Developments Limited
Leawood (Management) Company Limited
MCA Developments Limited
MCA East Limited
MCA Holdings Limited
MCA Land Limited
MCA Leicester Limited
MCA London Limited
MCA North East Limited
MCA Northumbria Limited
MCA Partnership Housing Limited
MCA South West Limited
MCA Thames Valley Limited
MCA West Limited
MCA West Midlands Limited
MCA Yorkshire Limited
McLean Homes Bristol & West Limited
McLean Homes Holdings Limited
McLean Homes Limited
McLean Homes Southern Limited
Melbourne Investments Limited
Pangbourne Developments Limited
Pennant Investments Limited
Prestoplan Limited
River Farm Developments Limited
Showpine Limited
South Bristol (Ashton Park) Limited
Spinks & Denning Limited
St Anne's Village Limited
St. Katharine By The Tower Limited
St. Katharine Haven Limited
Tawnywood Developments Limited
Taylor Insurance Brokers Limited
Taylor Wimpey 2007 Limited
Taylor Wimpey Capital Developments Limited
Taylor Wimpey Commercial Properties Limited
Taylor Wimpey Europe
Taylor Wimpey Garage Nominees No 1 Limited
Taylor Wimpey Garage Nominees No 2 Limited
Taylor Wimpey International Limited
Taylor Wimpey IP (Holdings) 2005 Limited
Taylor Wimpey Property Company Limited
Taylor Wimpey Property Management Limited
Taylor Wimpey SH Capital Limited
Thameswey Homes Limited
The Garden Village Partnership Limited
The Lifebuilding Company Limited
The Wilson Connolly Employee Benefit Trust Limited
This is G2 Limited
Thomas Lowe and Sons, Limited
Thomas Lowe Homes Limited
TW NCA Limited
Wain Estates Limited
Wainhomes (Chester) Limited
Wainhomes (Northern) Limited
Wainhomes (Southern) Limited
Wainhomes (Yorkshire) Limited
Wainhomes Group Limited
Wainhomes Holdings Limited
Wainhomes Limited
Whelmar (Chester) Limited
Whelmar (Lancashire) Limited
Whelmar (North Wales) Limited
Whelmar Developments Limited
White House Land Limited
Wilcon Construction Limited
Wilcon Homes Anglia Limited
Wilcon Homes Eastern Limited
Wilcon Homes Midlands Limited
Wilcon Homes Northern Limited
Wilcon Homes Southern Limited
Wilcon Homes Western Limited
Wilcon Lifestyle Homes Limited
Wilfred Homes Limited
Wilson Connolly Holdings Limited
Wilson Connolly Investments Limited
Wilson Connolly Limited
Wilson Connolly Logistics Limited
Wilson Connolly Properties Limited
Wilson Connolly Quest Limited
Wimgrove Developments Limited
Wimgrove Property Trading Limited
Wimpey Construction Developments Limited
Wimpey Construction Iran Limited
Wimpey Corporate Services Limited
Wimpey Dormant Investments Limited
Wimpey Finance Plc
Wimpey Geotech Limited
Wimpey Group Services Limited
Wimpey Gulf Holdings Limited
Wimpey Overseas Holdings Limited
Woranes Investments Limited
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
143
143
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Particulars of Subsidiaries, Associates and Joint Ventures continued
Company Name
Academy Central LLP
Bishops Park Limited
Bishop's Stortford North
Consortium Limited
Bromley Park (Holdings) Limited
Bromley Park Limited
Bryant Homes Scotland Limited
Canberra Developments (Southern) Limited
Capital Court Property
Management Limited
Chobham Manor LLP
Compine Developments (Mundford) Limited
Compine Developments Limited
Countryside 27 Limited
DFE TW Residential Limited
Emersons Green Urban Village Limited
Falcon Wharf Limited
Gallagher Bathgate Limited
George Wimpey East Scotland Limited
% Owned
Registered Office
62% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
50% The Manor House, North Ash Road, New Ash Green, Longfield, Kent, DA3 8HQ,
United Kingdom
33.33% The Manor House, North Ash Road, New Ash Green, Longfield, Kent, DA3 8HQ,
United Kingdom
50% Kent House, 14-17 Market Place, London, W1W 8AJ, United Kingdom
50% Kent House, 14-17 Market Place, London, W1W 8AJ, United Kingdom
100% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive,
Abbotsinch, Paisley, PA3 2SJ, United Kingdom
100% BDO LLP, 125 Colmore Row, Birmingham, B3 3SD, United Kingdom
17.17% 4 Capital Court, Bittern Road, Sowton Industrial Estate, Exeter, Devon, EX2 7FW,
United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
50% Two Snowhill, Birmingham, B4 6GA, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
50% Countryside House, The Drive Great Warley, Brentwood, Essex, CM13 3AT, United Kingdom
50% 7 Whiteladies Road, Clifton, Bristol, BS8 1NN, United Kingdom
54.44% 135 Aztec West, Almondsbury, Bristol, Avon, BS32 4UB, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
100% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive, Abbotsinch,
Paisley, PA3 2SJ, United Kingdom
George Wimpey West Scotland Limited
100% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive, Abbotsinch,
GN Tower Limited
Greenwich Millennium Village Limited
Grove Consultants Limited
GW City Ventures Limited
GWNW City Developments Limited
Haydon Development Company Limited
Laing Retirement Homes Limited
Laing Wimpey Alireza Limited
London and Clydeside Estates Limited
Paisley, PA3 2SJ, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
50% Countryside House, The Drive Great Warley, Brentwood, Essex, CM13 3AT, United Kingdom
100% Two Snowhill, Birmingham, B4 6GA, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
19.27% 6 Drakes Meadow, Penny Lane, Swindon, Wiltshire, SN3 3LL, United Kingdom
100% Two Snowhill, Birmingham, B4 6GA, United Kingdom
33.33% PO Box 2059, Jeddah, CR9483, Saudi Arabia
100% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive, Abbotsinch,
Paisley, PA3 2SJ, United Kingdom
London and Clydeside Holdings Limited
100% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive, Abbotsinch,
Los Arqueros Gulf and Country Club S.A.
Lynmouth Management Company Limited
MacKenzie Developments
(Linlithgow) Limited
MCA (Alsager) Limited
McHawk Limited
Morrison Land Development Inc
North Swindon Development
Company Limited
Notepath Limited
Padyear Limited
Paycause Limited
Phoenix Birmingham Latitude Limited
Quedgeley Urban Village Limited
Robert Hobbs Limited
Rockhold Land Limited
Shire Business Park Limited
Springfield Environmental Limited
144
144
Paisley, PA3 2SJ, United Kingdom
74.67% Carretera de Ronda A-397; Km. 44,5, Benahavis, Málaga, Spain
20% 2 Hills Road, Cambridge, Cambridgeshire, CB2 1JP, United Kingdom
100% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive, Abbotsinch,
Paisley, PA3 2SJ, United Kingdom
100% BDO LLP, 125 Colmore Row, Birmingham, B3 3SD, United Kingdom
100% BDO LLP, 125 Colmore Row, Birmingham, B3 3SD, United Kingdom
100% 9366, 49St NW, Edmonton, AB T6B 2L7, Canada
16.79% 6 Drakes Meadow, Penny Lane, Swindon, Wiltshire, SN3 3LL, United Kingdom
100% Two Snowhill, Birmingham, B4 6GA, United Kingdom
50% Hanson House, 14 Castle Hill, Maidenhead, SL6 4JJ, United Kingdom
66.67% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
50% 135 Aztec West, Almondsbury, Bristol, Avon, BS32 4UB, United Kingdom
100% BDO LLP, 125 Colmore Row, Birmingham, B3 3SD, United Kingdom
100% Two Snowhill, Birmingham, B4 6GA, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
100% Two Snowhill, Birmingham, B4 6GA, United Kingdom
www.taylorwimpey.co.uk
www.taylorwimpey.co.uk
Company Name
Springfield Ventures Limited
St George Little Britain (No.1) Limited
St George Little Britain (No.2) Limited
Strada Developments Limited
% Owned
Registered Office
100% Two Snowhill, Birmingham, B4 6GA, United Kingdom
50% Berkeley House, 19 Portsmouth Road, Cobham, Surrey, KT11 1JG, United Kingdom
50% Berkeley House, 19 Portsmouth Road, Cobham, Surrey, KT11 1JG, United Kingdom
50% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive, Abbotsinch,
Paisley, PA3 2SJ, United Kingdom
Taylor Wimpey (General Partner) Limited
100% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive, Abbotsinch,
Paisley, PA3 2SJ, United Kingdom
Taylor Wimpey (Initial LP) Limited
100% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive, Abbotsinch,
Paisley, PA3 2SJ, United Kingdom
Taylor Wimpey Pension Trustees Limited
Taylor Wimpey Scottish Limited Partnership
99% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
100% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive, Abbotsinch,
Taylor Woodrow (Gibraltar) Holdings
2004 Limited
Taylor Woodrow (Gibraltar) Limited
The Trafalgar Company Limited
Triumphdeal Limited
TW Cavendish Holdings Limited
UX Central Freehold Limited
Vantage West Limited
Vigobridge Limited
Vumpine Limited
Wainhomes (Central) Limited
Wainhomes (Lancashire) Limited
Waxlow Properties Limited
Weaver Developments
(Woodfield Plantation) Limited
Whatco England Limited
Whitehill & Bordon Regeneration
Company Limited
Wilcon Homes North West Limited
Wilcon Homes Scotland Limited
Wimpey Aggregates Limited
Wimpey Engineering Limited
Wimpey Laing Iran Limited
Wimpey Laing Limited
Wimpey Saudi Company Limited
Paisley, PA3 2SJ, United Kingdom
100% 10 / 8 International Commercial Centre, Casemates Square, Gibraltar, United Kingdom
100% 17 Bayside Road, Gibraltar, United Kingdom
100% 3rd Floor, One the Esplanade, St. Helier, Jersey, JE2 3QA, Channel Islands
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
100% BDO LLP, 125 Colmore Row, Birmingham, B3 3SD, United Kingdom
100% Two Snowhill, Birmingham, B4 6GA, United Kingdom
100% Two Snowhill, Birmingham, B4 6GA, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
100% BDO LLP, 125 Colmore Row, Birmingham, B3 3SD, United Kingdom
100% BDO LLP, 125 Colmore Row, Birmingham, B3 3SD, United Kingdom
100% Two Snowhill, Birmingham, B4 6GA, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
100% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive, Abbotsinch,
Paisley, PA3 2SJ, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
100% BDO LLP, 125 Colmore Row, Birmingham, B3 3SD, United Kingdom
100% Unit C, Ground Floor, Cirrus Glasgow Airport Business Park, Marchburn Drive, Abbotsinch,
Paisley, PA3 2SJ, United Kingdom
100% BDO LLP, 125 Colmore Row, Birmingham, B3 3SD, United Kingdom
100% Two Snowhill, Birmingham, B4 6GA, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
50% Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR, United Kingdom
75% PO Box 90, Alkhobar, 31952, Saudi Arabia
145
145
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Taylor Wimpey plc
Annual Report and Accounts 2015
Annual Report and Accounts 2015
Five Year Review
£ million
Revenue – continuing operations
Profit on ordinary activities before exceptional items, finance costs and tax
Share of results of joint ventures
Exceptional items
Net finance costs, including exceptional finance costs
Profit for the financial year before taxation
Taxation (charge)/credit
Profit for the year from discontinued operations
Profit for the financial year
Profit for the financial year before taxation and exceptional items
Balance sheet
Intangible assets
Property, plant and equipment
Interests in joint ventures
Non-current trade and other receivables
Non-current assets (excluding tax)
Inventories
Other current assets (excluding tax and cash)
Trade and other payables
Provisions
Net-current assets (excluding tax and cash)
Trade and other payables
Retirement benefit obligations
Provisions
Non-current liabilities (excluding debt)
Net cash/(debt)
Tax balances
Net assets
Capital employed
Add back intangibles
Less tax balances
Net operating assets
Statistics
Adjusted basic earnings per share – continuing Group
Tangible net assets per share
Number of shares in issue at year end (millions)
Return on capital employed(a)
Operating margin
Return on net operating assets
Growth in net assets
UK short term landbank (plots)(b)
UK ASP £000
UK Completions (homes)
2015
3,139.8
632.1
4.9
(0.6)
(33.2)
603.2
(113.4)
–
489.8
603.8
2.7
20.0
27.1
95.4
145.2
3,891.2
114.0
(1,093.4)
(31.1)
2,880.7
(402.0)
(178.4)
(2.9)
(583.3)
223.3
57.4
2,723.3
2,497.3
2.7
(57.4)
2,442.6
14.9p
83.5p
3,258.6
25.9%
20.3%
27.1%
7.4%
75,710
230
13,341
2014
2,686.1
478.1
2.6
18.7
(30.6)
468.8
(94.4)
–
374.4
450.1
2.5
16.8
38.6
111.1
169.0
3,490.1
102.6
(910.0)
(40.4)
2,642.3
(361.5)
(183.8)
(1.0)
(546.3)
112.8
157.5
2,535.3
2,420.0
2.5
(157.5)
2,265.0
11.2p
77.9p
3,253.5
20.6%
17.9%
22.5%
12.6%
75,136
213
12,454
2013
2,295.5
309.7
3.2
45.6
(52.3)
306.2
(66.4)
31.3
271.1
268.4
4.2
8.3
34.7
110.8
158.0
2,928.8
118.5
(793.9)
(28.3)
2,225.1
(193.7)
(183.8)
(6.0)
(383.5)
5.4
246.8
2,251.8
2,242.2
4.2
(246.8)
1,999.6
6.7p
69.6p
3,237.0
14.6%
13.6%
16.8%
13.2%
70,628
191
11,696
2012(c)
2,019.0
223.7
2.4
–
(21.9)
204.2
24.4
–
228.6
181.8
5.2
7.1
31.5
102.0
145.8
2,788.8
96.0
(772.6)
(84.4)
2,027.8
(190.8)
(244.2)
(10.7)
(445.7)
(59.0)
320.6
1,989.5
2,043.3
5.2
(320.6)
1,727.9
4.6p
61.5p
3,228.3
11.3%
11.2%
13.3%
8.4%
65,409
181
10,886
2011
1,808.0
158.3
1.2
(5.8)
(75.1)
78.6
(22.7)
43.1
99.0
89.9
5.1
5.0
31.9
70.3
112.3
2,686.6
72.5
(697.8)
(76.6)
1,984.7
(199.7)
(210.2)
(18.5)
(428.4)
(116.9)
283.3
1,835.0
1,946.8
5.1
(283.3)
1,668.6
2.1p
57.3p
3,201.4
8.3%
8.8%
9.8%
0.7%
65,264
171
10,180
(a) Return on capital employed is calculated as profit on ordinary activities before amortisation of brands, exceptional items, finance costs and tax but including share of results of joint ventures,
divided by the average of opening and closing capital employed.
(b) The total number of plots that we either own or control, with some form of planning consent (including joint ventures from 2013).
(c) The results for 2012 have been restated to reflect the adoption of IAS 19 ‘Employee benefits’ (amended 2011).
146
146
Shareholder Information
Notice of Annual General Meeting
This notice of meeting is important and requires your immediate
attention. If you are in any doubt as to the action you should take,
you are recommended to seek your own financial advice immediately
from a stockbroker, solicitor, bank manager, accountant, or other
independent financial adviser authorised under the Financial
Services and Markets Act 2000.
If you have sold or otherwise transferred all of your shares in Taylor
Wimpey plc (the ‘Company’), please pass this document together
with the accompanying documents to the purchaser or transferee,
or to the person who arranged the sale or transfer so they can pass
these documents to the person who now holds the shares. If you have
sold or transferred part only of your holding of shares in the Company,
please consult the person who arranged the sale or transfer.
Notice is hereby given of the eighty first Annual General Meeting
of the Company to be held on 28 April 2016 at 11:00 am at
The British Medical Association, BMA House, Tavistock Square,
London, WC1H 9JP for the following purposes:
Ordinary Business
Ordinary Resolutions:
1. To receive the Directors’ Report, Directors’ Remuneration Report,
Strategic Report, the Auditor’s Report and the Financial Statements
for the year ended 31 December 2015.
2. To declare due and payable on 20 May 2016 a final dividend
of 1.18 pence per ordinary share of the Company for the year
ended 31 December 2015 to shareholders on the register at
close of business on 8 April 2016.
3. To declare due and payable on 15 July 2016 a special dividend
of 9.20 pence per ordinary share of the Company to shareholders
on the register at close of business on 3 June 2016.
4. To re-elect as a Director, Kevin Beeston.
5. To re-elect as a Director, Pete Redfern.
6. To re-elect as a Director, Ryan Mangold.
7. To re-elect as a Director, James Jordan.
8. To re-elect as a Director, Kate Barker DBE.
9. To re-elect as a Director, Baroness Ford of Cunninghame.
10. To re-elect as a Director, Mike Hussey.
11. To re-elect as a Director, Robert Rowley.
12. To elect as a Director, Humphrey Singer.
13. To re-appoint Deloitte LLP as auditor of the Company, to hold office
until the conclusion of the next general meeting at which accounts
are laid before the Company.
14. Subject to the passing of resolution 13, to authorise the Audit
Committee to determine the remuneration of the auditor on
behalf of the Board.
15. That the Board be generally and unconditionally authorised to
allot shares in the Company and to grant rights to subscribe
for or convert any security into shares in the Company:
(A)
up to a nominal amount of £10,881,077 (such amount
to be reduced by any allotments or grants made under
paragraph (B) below, in excess of £10,881,077); and
www.taylorwimpey.co.uk
(B)
comprising equity securities (as defined in the Companies
Act 2006) up to a nominal amount of £21,762,155 (such
amount to be reduced by any allotments or grants made
under paragraph (A) above) in connection with an offer by
way of a rights issue:
(i) to ordinary shareholders in proportion (as nearly as
may be practicable) to their existing holdings; and
(ii) to holders of other equity securities as required by the
rights of those securities or as the Board otherwise
considers necessary,
and so that the Board may impose any limits or restrictions and
make any arrangements which it considers necessary or appropriate
to deal with treasury shares, fractional entitlements, record dates,
legal, regulatory or practical problems in, or under the laws of, any
territory or any other matter, such authorities to apply until the end
of the Annual General Meeting of the Company in 2017 (or, if earlier,
until the close of business on 27 July 2017) but, in each case, so that
the Company may make offers and enter into agreements during
this period which would, or might, require shares to be allotted
or rights to subscribe for or convert securities into shares to be
granted after the authority ends; and the Board may allot shares or
grant rights to subscribe for or convert securities into shares under
any such offer or agreement as if the authority had not ended.
Special Resolutions:
16. That, if resolution 15 is passed, the Board be given the power to allot
equity securities (as defined in the Companies Act 2006) for cash
under the authority given by that resolution and/or to sell ordinary
shares held by the Company as treasury shares for cash, free of the
restriction in Section 561 of the Companies Act 2006, such power
to be limited:
(A)
to the allotment of equity securities and sale of treasury shares
for cash in connection with an offer of or invitation to apply for
equity securities (but in the case of the authority granted under
paragraph (B) of resolution 15, by way of a rights issue only):
(i) to ordinary shareholders in proportion (as nearly as may
be practicable) to their existing holdings; and
(ii) to holders of other equity securities, as required by the
rights of those securities, or as the Board otherwise
considers necessary,
and so that the Board may impose any limits or restrictions and
make any arrangements which it considers necessary or appropriate
to deal with treasury shares, fractional entitlements, record dates,
legal, regulatory or practical problems in, or under the laws of,
any territory or any other matter; and
(B)
in the case of the authority granted under paragraph (A) of
resolution 15 and/or in the case of any sale of treasury shares
for cash, to the allotment of equity securities or sale of treasury
shares (otherwise than under paragraph (A) above) up to a
nominal amount of £1,632,161, such power to apply until the
conclusion of the Annual General Meeting of the Company in
2017 (or, if earlier, until the close of business on 27 July 2017),
but during this period the Company may make offers, and
enter into agreements, which would, or might, require equity
securities to be allotted (and treasury shares to be sold) after
the power ends; and the Board may allot equity securities
(and sell treasury shares) under any such offer or agreement
as if the power had not ended.
147
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Annual Report and Accounts 2015
Shareholder Information
Notice of Annual General Meeting continued
17. That the Company be authorised for the purposes of Section 701
of the Companies Act 2006 to make market purchases (within
the meaning of Section 693(4) of the Companies Act 2006) of the
ordinary shares of 1 pence each of the Company (ordinary shares),
provided that:
(A)
(B)
(C)
(D)
(E)
the maximum number of ordinary shares hereby authorised
to be purchased shall be 326,432,300;
the minimum price (exclusive of expenses) which may be
paid for ordinary shares is 1 pence per ordinary share;
the maximum price (exclusive of expenses) which may be
paid for an ordinary share is the highest of:
(i) an amount equal to 105% of the average of the middle
market quotations for an ordinary share (as derived from
the London Stock Exchange Daily Official List) for the five
business days immediately preceding the date on which
such ordinary share is purchased; and
(ii) the higher of the price of the last independent trade and
the highest independent bid on the trading venues
where the purchase is carried out;
the authority hereby conferred shall expire at the earlier of the
conclusion of the Annual General Meeting of the Company in
2017 and 27 October 2017 unless such authority is renewed
prior to such time; and
the Company may make contracts to purchase ordinary shares
under the authority hereby conferred prior to the expiry of such
authority which will or may be executed wholly or partly after
the expiry of such authority, and may purchase ordinary shares
in pursuance of any such contracts, as if the authority
conferred by this resolution had not expired.
Special Business
Ordinary Resolutions:
18. To approve the Directors’ Remuneration Report on pages 68 to 85
for the financial year ended 31 December 2015.
19. That in accordance with Sections 366 and 367 of the Companies
Act 2006, the Company and all companies which are its subsidiaries
when this resolution is passed are authorised to:
(A)
(B)
(C)
make political donations to political parties and/or independent
election candidates not exceeding £250,000 in aggregate;
make political donations to political organisations other than
political parties not exceeding £250,000 in aggregate; and
incur political expenditure not exceeding £250,000 in
aggregate, during the period beginning with the date of
passing this resolution and the conclusion of the Annual
General Meeting of the Company in 2017. For the purposes of
this resolution the terms ‘political donations’, ‘political parties’,
‘independent election candidates’, ‘political organisation’ and
‘political expenditure’ have the meanings given by Sections
363 to 365 of the Companies Act 2006.
20. That the sale of a first floor, two bedroom apartment no. 3-1-2 at
the Costa Beach development in Port Vell, Son Servera, Mallorca,
by Taylor Wimpey de España S.A.U., for the sum of €278,000, to
Mr Pete Redfern, a Director of the Company, be hereby approved.
21. That the sale of a top floor, two bedroom apartment no. 2-2-6 at
the Costa Beach development in Port Vell, Son Servera, Mallorca,
by Taylor Wimpey de España S.A.U., for the sum of €356,250, to
Mr Pete Redfern, a Director of the Company, be hereby approved.
22. That the sale of Plot 90 at the Radius development, Osiers Road,
Wandsworth, London, SW18, by Taylor Wimpey UK Limited, for the
sum of £648,964, to Mr Ryan Mangold, a Director of the Company,
be hereby approved.
Special Resolution:
23. That a general meeting other than an Annual General Meeting
of the Company may continue to be called on not less than
14 clear days’ notice.
Explanatory notes relating to each of the above resolutions are set
out on pages 150 to 155.
Action to be taken
If you wish to attend and vote at the Annual General Meeting in person,
please bring with you the attendance card accompanying this document.
It will help to authenticate your right to attend, speak and vote, and will help
us to register your attendance without delay. Registration will be available
from 9:30 am on the day of the meeting. For the safety and comfort of
those attending the meeting, large bags, cameras, recording equipment
and similar items will not be allowed into the building and in the interests
of security, by attending the meeting, upon request, you hereby agree to
be searched together with any bags and other possessions. The meeting
will commence at 11:00 am and light refreshments will be available from
9:30 am and also after the conclusion of the meeting. There is wheelchair
access to the venue for shareholders who require it or those with reduced
mobility. However, where required, attendees are strongly advised to bring
their own carers to assist with their general mobility around the venue.
An induction loop system operates in the meeting room. Directions to
the venue can be found on the reverse of your attendance card.
If you would like to vote on the resolutions but cannot come to the Annual
General Meeting, please complete the proxy form sent to you with this
notice and return it to our registrar as soon as possible. In order for it to
count, the registrar must receive it by no later than 11:00 am on 26 April
2016. If you prefer, you can submit your proxy electronically either via the
internet at www.capitashareportal.com or, if you are a CREST member,
through the CREST system by completing and transmitting a CREST
proxy instruction as described in the procedural notes below.
Recommendation
Your Directors are of the opinion that the resolutions to be proposed
at the Annual General Meeting are in the best interests of the Company
and its shareholders as a whole and recommend you to vote in favour
of them. Each Director will be doing so in respect of all of his or her
own beneficial shareholding.
www.taylorwimpey.co.uk
Inspection of documents
The following documents will be available for inspection at the
Company’s registered office, Gate House, Turnpike Road, High Wycombe,
Buckinghamshire HP12 3NR, during normal business hours from the date
of this notice of meeting until the date of the Annual General Meeting and
at The British Medical Association, BMA House, Tavistock Square, London,
WC1H 9JP from 15 minutes before the Annual General Meeting until it ends:
• copies of the Executive Directors’ service contracts;
• copies of the letters of appointment of the Chairman and
the Independent Non Executive Directors; and
• a copy of the full Annual Report and Financial Statements of the
Company for the year ended 31 December 2015, including the
Directors’ Remuneration Report referred to in resolution 18, is
also available on our website www.taylorwimpey.co.uk/corporate
By Order of the Board
James Jordan
Group Legal Director and Company Secretary
Taylor Wimpey plc
Registered Office:
Gate House
Turnpike Road
High Wycombe
Buckinghamshire HP12 3NR
(Registered in England and Wales under number 296805)
10 March 2016
148
149
Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Annual Report and Accounts 2015
Shareholder Information
Notes to the Notice of Meeting
Procedural notes
1. To be entitled to attend and vote at the Annual General Meeting
(and for the purpose of the determination by the Company of
the votes which shareholders may cast), shareholders must be
registered in the Register of Members of the Company at 6:00 pm
on 26 April 2016 (or, in the event of any adjournment, on the
date which is two days before the time of the adjourned meeting).
Shareholders then on the Register of Members shall be entitled
to attend and vote at the Annual General Meeting in respect of
the number of shares registered in their name at that time. Changes
to entries on the relevant Register of Members after that deadline
shall be disregarded in determining the rights of any person to
attend and vote at the Annual General Meeting.
2. As at 8 March 2016 (being the latest practicable date prior to
the publication of this notice) the Company’s issued share capital
consisted of 3,264,323,375 ordinary shares, carrying one
vote each. Therefore, the total voting rights in the Company
as at 8 March 2016 were 3,264,323,375.
3. If you are a shareholder of the Company at the time and date set
out in Note 1 above, you are entitled to appoint a proxy to exercise
all or any of your rights to attend and to speak and vote on your
behalf at the meeting. Shareholders may appoint more than one
proxy in relation to the Annual General Meeting provided that each
proxy is appointed to exercise the rights attached to a different
share or shares held by that shareholder. A proxy need not be a
shareholder of the Company but must attend the Annual General
Meeting to represent you. A proxy form which may be used to make
such appointment and give proxy instructions accompanies this
notice. If you do not have a proxy form and believe that you should
have one, or if you require additional forms, please contact Capita
Asset Services as soon as possible on +44 (0)371 664 0300 (calls
cost 12p per minute plus your phone company’s access charge;
from overseas +44 (0)20 8639 3399 (calls outside the United
Kingdom will be charged at the applicable international rate). Capita
Asset Services is open between 9.00 am – 5.30 pm, Monday to
Friday excluding public holidays in England and Wales. In the case
of joint holders, where more than one of the joint holders purports to
appoint a proxy, only the appointment submitted by the most senior
holder will be accepted. Seniority is determined by the order in which
the names of the joint holders appear in the Company’s Register of
Members in respect of the joint holdings (the first-named being the
most senior).
4. To be valid, any proxy form or other instrument appointing a
proxy must be received by Capita Asset Services at PXS 1, 34
Beckenham Road, Beckenham, Kent, BR3 4ZF, or, if you want
to use an envelope the address to use is simply FREEPOST
CAPITA PXS, or, if you prefer, electronically via the internet at
www.capitashareportal.com or, if you are a member of CREST,
via the service provided by Euroclear UK and Ireland Limited at
the electronic address provided in Note 9, in each case no later
than 11:00 am on 26 April 2016. Please note that all forms of proxy
received after this time will be void. A form of proxy sent electronically
at any time that is found to contain any virus will not be accepted.
5. The return of a completed proxy form, other such instrument
or any CREST Proxy Instruction (as further described in Notes 8
and 9 below) will not prevent a shareholder attending the Annual
General Meeting and voting in person if he/she wishes to do so.
6. Any person to whom this notice is sent who is a person nominated
under Section 146 of the Companies Act 2006 to enjoy information
rights (a ‘Nominated Person’) may, under an agreement between
him/her and the shareholder by whom he/she was nominated, have
a right to be appointed (or to have someone else appointed) as a
proxy for the Annual General Meeting. If a Nominated Person has no
such proxy appointment right or does not wish to exercise it, he/she
may, under any such agreement, have a right to give instructions
to the shareholder as to the exercise of voting rights. Such persons
should direct any communications and enquiries to the registered
holder of the shares by whom they were nominated and not to
the Company or its registrar.
7. The statement of the rights of shareholders in relation to the
appointment of proxies in Notes 3 and 4 above does not apply
to Nominated Persons. The rights described in these notes can
only be exercised by shareholders of the Company.
8. CREST members who wish to appoint a proxy or proxies through
the CREST electronic proxy appointment service may do so by using
the procedures described in the CREST Manual. CREST personal
members or other CREST sponsored members, and those CREST
members who have appointed a service provider(s), should refer to
their CREST sponsor or voting service provider(s), who will be able
to take the appropriate action on their behalf.
9. In order for a proxy appointment or instruction made using the
CREST service to be valid, it must be properly authenticated in
accordance with Euroclear UK and Ireland Limited’s specifications,
and must contain the information required for such instruction, as
described in the CREST Manual (available via www.euroclear.com/
CREST). The message, regardless of whether it constitutes the
appointment of a proxy or is an amendment to the instruction
given to a previously appointed proxy must, in order to be valid, be
transmitted so as to be received by the issuer’s agent (ID RA10) by
11:00 am on 26 April 2016. For this purpose, the time of receipt will
be taken to be the time (as determined by the time stamp applied
to the message by the CREST Application Host) from which the
issuer’s agent is able to retrieve the message by enquiry to CREST
in the manner prescribed by CREST. After this time any change
of instructions to proxies appointed through CREST should be
communicated to the appointee through other means.
10. CREST members and, where applicable, their CREST sponsors or
voting service providers should note that Euroclear UK and Ireland
Limited does not make available special procedures in CREST for
any particular message. Normal system timings and limitations will,
therefore, apply in relation to the input of CREST Proxy Instructions.
It is the responsibility of the CREST member concerned to take
(or, if the CREST member is a CREST personal member, or
sponsored member, or has appointed a voting service provider,
to procure that his CREST sponsor or voting service provider(s)
take(s)) such action as shall be necessary to ensure that a message
is transmitted by means of the CREST system by any particular
time. In this connection, CREST members and, where applicable,
their CREST sponsors or voting system providers are referred,
in particular, to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings.
11. The Company may treat as invalid a CREST Proxy Instruction in the
circumstances set out in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001.
12. Any corporation which is a member can appoint one or more
corporate representatives who may exercise on its behalf all of
its powers as a member provided that they do not do so in
relation to the same shares.
13. Under Section 527 of the Companies Act 2006 members meeting
the threshold requirements set out in that section have the right to
require the Company to publish on a website a statement setting
out any matter relating to:
(i)
(ii)
the audit of the Company’s accounts (including the Auditor’s
Report and the conduct of the audit) that are to be laid before
the Annual General Meeting; or
any circumstance connected with an auditor of the Company
ceasing to hold office since the previous meeting at which
annual accounts and reports were laid in accordance with
Section 437 of the Companies Act 2006.
The Company may not require the shareholders requesting any such
website publication to pay its expenses in complying with Sections
527 or 528 of the Companies Act 2006. Where the Company is
required to place a statement on a website under Section 527
of the Companies Act 2006, it must forward the statement to
the Company’s auditor not later than the time when it makes the
statement available on the website. The business which may be
dealt with at the Annual General Meeting includes any statement
that the Company has been required under Section 527 of the
Companies Act 2006 to publish on a website.
14. Any member attending the meeting has the right to ask questions
and participate in the meeting. The Company must cause to be
answered any such question relating to the business being dealt
with at the meeting but no such answer need be given if: (i) to do so
would interfere unduly with the preparation for the meeting or involve
the disclosure of confidential information; (ii) the answer has already
been given on a website in the form of an answer to a question;
or (iii) it is undesirable in the interests of the Company or the
good order of the meeting that the question be answered.
15. A copy of this Notice, and other information required by
Section 311A of the Companies Act 2006, can be found
at www.taylorwimpey.co.uk/corporate
16. Voting on all resolutions at this year’s Annual General Meeting will
be conducted by way of a poll, rather than on a show of hands.
The Board believes that a poll is more representative of shareholders’
voting intentions because it gives as many shareholders as possible
the opportunity to have their votes counted (whether their votes are
tendered by proxy in advance of, or in person at, the Annual General
Meeting). The results of the poll will be announced via a Regulatory
Information Service and made available at www.taylorwimpey.co.uk/
corporate as soon as practicable after the Annual General Meeting.
www.taylorwimpey.co.uk
Explanatory notes to the resolutions
Ordinary Business
Ordinary Resolutions
Ordinary resolutions require more than half of the votes cast
to be in favour.
Resolution 1: To receive the annual report and financial statements
English company law requires the Directors to lay the Financial
Statements of the Company for the year ended 31 December 2015
and the reports of the Directors, namely the Strategic Report, Directors’
Report and the Directors’ Remuneration Report, and the Auditor’s
Report; before a general meeting of the Company (the Annual Report).
Resolution 2: To declare a final dividend
The Directors recommend the payment of a final dividend of 1.18 pence
per share in respect of the year ended 31 December 2015. If approved
at the Annual General Meeting, the dividend will be paid on 20 May 2016
to shareholders who are on the Register of Members at the close of
business on 8 April 2016.
Resolution 3: To declare a special dividend
The Company has announced its intention to return cash to its
shareholders, through the payment of annual special dividends, always
subject to market and performance fluctuations. Due to the size of
these dividends, the Company believes it is appropriate to seek prior
shareholder approval for its payment, as it did at last year’s AGM.
Further details on the rationale for paying special dividends and the link
to the Company’s current strategy, can be found on page 12.
The aggregate cost of the special dividend for 2016 will be around
£300 million and will be met from profits and surplus cash generated
during 2016. If approved, it will be paid on 15 July 2016 to shareholders
on the register at the close of business on 3 June 2016.
Dividend Re-Investment Plan
Subject to shareholders approving either or both of the dividends
as set out in Resolutions 2 and 3 at the Annual General Meeting
scheduled for 28 April 2016, the Company will be offering a Dividend
Re-Investment Plan (DRIP) on each one. The DRIP is provided and
administered by the DRIP plan administrator, Capita IRG Trustees
Limited, which is authorised and regulated by the Financial Conduct
Authority (FCA). The DRIP offers shareholders the opportunity to elect
to invest cash dividends received on their ordinary shares, in purchasing
further ordinary shares of the Company. These shares would be bought
in the market, on competitive dealing terms.
The DRIP will operate automatically in respect of the Final Dividend
for 2015 (unless varied beforehand by shareholders) and all future
dividends, including special dividends, until such time as you withdraw
from the DRIP or the DRIP is suspended or terminated in accordance
with the Terms and Conditions.
Shareholders are again reminded to check the position with regard
to any dividend mandates that are in place, should you either wish to
participate in the DRIP or discontinue or vary any participation, as
existing mandates will apply to all dividend payments (including
special dividends) unless or until revoked.
150
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Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41
Taylor Wimpey plc
Annual Report and Accounts 2015
Shareholder Information
Notes to the Notice of Meeting continued
CREST
For shares held in uncertificated form (CREST), please note that
elections continue to apply only to one dividend and a fresh
election must be made, via CREST, for each dividend.
Full details of the terms and conditions of the DRIP and the actions
required to make or revoke an election, both in respect of maintenance
dividends (i.e. in this case, the 2015 final dividend) and any special
dividends, are available at www.capitashareportal.com or on request
from the Registrar, Capita Asset Services, The Registry, 34 Beckenham
Road, Beckenham, Kent, BR3 4TU, email: shares@capita.co.uk or call
+44 (0)371 664 0381. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the United Kingdom will
be charged at the applicable international rate. The Registar is open
between 9:00 am and 5:30 pm, Monday to Friday excluding public
holidays in England and Wales.
Resolutions 4 to 12: Election of Directors
In accordance with the UK Corporate Governance Code (the ‘Code’)
which states that all directors of FTSE 350 companies should be subject
to annual election by shareholders, the Board has resolved that all
Directors of the Company will retire and, being eligible, offer themselves
for re-election or election, as appropriate, by shareholders at the Annual
General Meeting.
Details of the Directors’ service contracts, remuneration and interests
in the Company’s shares and other securities are given in the Directors’
Remuneration Report to shareholders on pages 68 to 85 of the Report
and Accounts. Full biographical information concerning each Director
can be found on pages 44 and 45 of the Report and Accounts.
The following summary information is given in support of the Board’s
proposal for the re-election of the Directors of the Company:
Kevin Beeston – offers himself for re-election.
Kevin has been Chairman of the Board since July 2010. The Board is
satisfied that he continues to carry out his duties to a very high standard
including at meetings of the Board and of the Nomination Committee
(which he Chairs) and the Remuneration Committee, and that his other
commitments do not detract from the extent or quality of time which he
is able to devote to the Company. His biography appears on page 44
and there is additional information on page 52.
Pete Redfern – offers himself for re-election.
Pete has been Chief Executive since July 2007 and was previously
Group Chief Executive of George Wimpey Plc. His biography appears
on page 44 and there is additional information on page 53.
Ryan Mangold – offers himself for re-election.
Ryan has been Group Finance Director since November 2010.
His biography appears on page 44 and there is additional
information on page 53.
James Jordan – offers himself for re-election.
James has been Group Legal Director since July 2011 and is also
the Group Company Secretary, a position he has held since 2007.
His biography appears on page 44 and there is additional information
on page 53.
Kate Barker DBE – offers herself for re-election.
Kate has been an Independent Non Executive Director since April 2011.
The Board is satisfied that she continues to be independent in character
and judgement in applying her expertise at meetings of the Board and
of the Audit, Nomination and Remuneration Committees, and that her
other commitments do not detract from the extent or quality of time
which she is able to devote to the Company. Her biography appears
on page 45 and there is additional information on page 53.
Baroness Ford of Cunninghame – offers herself for re-election.
Margaret has been an Independent Non Executive Director since
April 2013. The Board is satisfied that she continues to be independent
in character and judgement in applying her expertise at meetings of
the Board and of the Remuneration Committee (which she Chairs)
and Nomination Committee. The Board has also reviewed her other
commitments in the light of her Chairmanship of Grainger plc and has
determined that they do not detract from the extent or quality of time
which she is able to devote to the Company. Her biography appears
on page 45 and there is additional information on page 53.
Mike Hussey – offers himself for re-election.
Mike has been an Independent Non Executive Director since July 2011.
The Board is satisfied that he is independent in character and judgement
in applying his expertise at meetings of the Board and of the Audit and
Nomination Committees, and that his other commitments do not
detract from the extent or quality of time which he is able to devote
to the Company. His biography appears on page 45 and there is
additional information on page 53.
Robert Rowley – offers himself for re-election.
Rob has been an Independent Non Executive Director since
January 2010 and the Senior Independent Director since April 2010.
The Board is satisfied that he continues to be independent in character
and judgement in applying his expertise at meetings of the Board
and of the Audit Committee (which he Chairs) and the Nomination
and Remuneration Committees, and that his other commitments do
not detract from the extent or quality of time which he is able to devote
to the Company. His biography appears on page 45 and there is
additional information on page 53.
Humphrey Singer – offers himself for election.
Humphrey has been an Independent Non Executive Director since
9 December 2015, having been appointed by the Board since the last
AGM. The Board is satisfied that he is independent in character and
judgement in applying his expertise at meetings of the Board and of the
Audit and Nomination Committees, and that his other commitments do
not detract from the extent or quality of time which he is able to devote
to the Company. His biography appears on page 45 and there is
additional information on page 53.
The Board confirms that each of the above Directors has recently been
subject to formal performance evaluation, details of which are set out
in the Corporate Governance Report in the Report and Accounts on
pages 46 to 57, and that each continues to demonstrate commitment
and to be an effective member of the Board. In compliance with
provision B.7.2 of the Code, the Chairman hereby confirms that,
following the formal performance evaluation referred to above, the
performance of each of the Non Executive Directors continues to
be effective and that each continues to demonstrate commitment
to the role.
www.taylorwimpey.co.uk
Resolution 13: Re-appointment of Deloitte LLP (Deloitte)
as auditor of the Company
The Company is required to appoint auditors at each general meeting
at which accounts are laid before the shareholders. It is therefore
proposed that the auditor is appointed from the conclusion of the 2016
Annual General Meeting until the conclusion of the next general meeting
at which accounts are laid before shareholders. Following an annual
review of Deloitte’s performance, details of which are set out
on page 64, the Board recommends the re-appointment of Deloitte
as the Company’s auditor.
Resolution 14: Authorisation of the Audit Committee to agree
on behalf of the Board the remuneration of Deloitte as auditor
The Board seeks shareholders’ authority for the Audit Committee
to determine on behalf of the Board the remuneration of Deloitte for
their services. The Board has adopted a procedure governing the
appointment of Deloitte to carry out non-audit services, details of
which are given in the Audit Committee Report. Details of non-audit
services performed by Deloitte in 2015 are given in Note 6 on page
110 of the Report and Accounts.
Resolution 15: Authority to allot shares
The Directors wish to renew the existing authority to allot unissued
shares in the Company, which was granted at the Company’s last
Annual General Meeting held on 23 April 2015 and is due to expire
at the conclusion of this Annual General Meeting. Accordingly,
Paragraph (A) of resolution 15 would give the Directors the authority
to allot ordinary shares or grant rights to subscribe for or convert any
securities into ordinary shares up to an aggregate nominal amount
equal to £10,881,077 (representing 1,088,107,700 ordinary shares). This
amount represents approximately one-third of the issued ordinary share
capital of the Company as at 8 March 2016, the latest practicable date
prior to publication of this notice of meeting.
In line with guidance issued by The Investment Association (formerly
the Association of British Insurers) (TIA), paragraph (B) of resolution
15 would give the Directors authority to allot ordinary shares or grant
rights to subscribe for or convert any securities into ordinary shares
in connection with a rights issue in favour of ordinary shareholders up
to an aggregate nominal amount equal to £21,762,155 (representing
2,176,215,500 ordinary shares), as reduced by the nominal amount
of any shares issued under paragraph (A) of resolution 15. This amount
(before any reduction) represents approximately two-thirds of the issued
ordinary share capital of the Company as at 8 March 2016, the latest
practicable date prior to publication of this notice of meeting.
The Company does not hold any shares in treasury.
The authorities sought under paragraphs (A) and (B) of resolution
15 will expire at the earlier of 27 July 2017 and the conclusion of
the Annual General Meeting of the Company to be held in 2017.
The Directors have no present intention to exercise either of the
authorities sought under this resolution. However, if they do exercise
the authorities, the Directors intend to follow TIA recommendations
concerning their use (including as regards the Directors standing
for re-election in certain cases).
Special Resolutions
Special resolutions require at least a 75% majority of votes cast to
be cast in favour.
Resolution 16: Authority to dis-apply pre-emption rights
The Board wishes to renew the existing authority from shareholders
to allot shares or sell any shares held in treasury for cash otherwise
than to existing shareholders pro rata to their holdings. Resolution 16,
which will be proposed as a special resolution and therefore requires a
75% majority of votes to be cast in favour, would give the Directors the
authority to allot ordinary shares (or sell any ordinary shares which the
Company elects to hold in treasury) for cash without first offering them
to existing shareholders in proportion to their existing shareholdings.
This authority would be limited to (a) allotments or sales in connection
with pre-emptive offers and offers to holders of other equity securities
if required by the rights of those shares or as the Board otherwise
considers necessary, or (b) otherwise up to an aggregate nominal
amount of £1,632,161 (representing 163,216,100 ordinary shares).
This aggregate nominal amount represents approximately 10% of the
issued ordinary share capital of the Company as at 8 March 2016, the
latest practicable date prior to publication of this notice. The Board
confirms that it will only allot shares representing more than 5% of the
issued ordinary share capital of the Company (excluding treasury shares),
for cash pursuant to the authority referred to in (b), where that allotment
is in connection with an acquisition or specified capital investment (within
the meaning given in the Pre-Emption Group’s Statement of Principles)
which is announced contemporaneously with the allotment, or which
has taken place in the preceding six month period and is disclosed in
the announcement of the allotment. In respect of the authority referred
to in (b), the Directors confirm their intention to follow the provisions of
the Pre-Emption Group’s Statement of Principles regarding cumulative
usage of authorities within a rolling three-year period where the Principles
provide that usage in excess of 7.5% should not take place without prior
consultation with shareholders, except in connection with an acquisition
or specified capital investment as referred to above.
The authority will expire at the earlier of 27 July 2017 and the conclusion
of the Annual General Meeting of the Company held in 2017.
Resolution 17: Authority to make market purchases of shares
Any purchases under this authority would be made in one or more
tranches and would be limited in aggregate to 10% of the ordinary
shares of the Company in issue at the close of business on
8 March 2016.
The maximum price to be paid on any exercise of the authority would
not exceed the highest of (i) 105% of the average of the middle market
quotations for the Company’s ordinary shares for the five business days
immediately preceding the date of the purchase; and (ii) the higher of the
price of the last independent trade and the highest current independent
bid on the trading venues where the purchase is carried out. Shares
purchased pursuant to these authorities could be held as treasury
shares, which the Company can re-issue quickly and cost-effectively,
and provides the Company with additional flexibility in the management
of its capital base. The total number of shares held as treasury shall not
at any one time exceed 10% of the Company’s issued share capital.
Accordingly, any shares bought back over the 10% limit will be
cancelled. The Company currently holds no shares in treasury.
This is a standard resolution, sought by the majority of public listed
companies at Annual General Meetings. The Board’s current intention
of utilising this authority is generally limited to acquiring shares for the
various share scheme arrangements. The Board would only consider
a more formal share purchase programme if it would result in an increase
in earnings per share and was in the best interests of shareholders
generally, having regard to all relevant circumstances.
The total number of options and conditional share awards to subscribe
for ordinary shares outstanding as at the close of business on 8 March
2016 was 38,600,693, representing approximately 1.2% of the issued
ordinary share capital of the Company as at that date and approximately
1.3% of the Company’s issued ordinary share capital following any
exercise in full of this authority to make market purchases.
This authority will last until the earlier of 27 October 2017 and the
conclusion of the Company’s Annual General Meeting in 2017.
152
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Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Shareholder Information
Notes to the Notice of Meeting continued
Special Business
Ordinary Resolutions
Resolution 18: Approval of the Directors’ Remuneration Report
for the year ended 31 December 2015
The Directors are required to prepare an annual report detailing the
remuneration of the Directors and a statement by the Chairman of
the Remuneration Committee (together the ‘Directors’ Remuneration
Report’). The Company is required to seek shareholders’ approval in
respect of the contents of this report on an annual basis. The vote is
an advisory one.
The Company’s Remuneration Policy was approved by shareholders
at the Company’s 2014 AGM and remains unchanged. In such
circumstances, the Policy need not be re-submitted to shareholders
for three years (unless amendments are proposed to it) and accordingly,
there is no equivalent resolution at this year’s AGM.
The Directors’ Remuneration Report is set out on pages 68 to 85
of the Annual Report and Accounts.
The Company’s current Remuneration Policy is available on the
Company’s website at: www.taylorwimpey.co.uk/corporate/investor-
relations/corporate-governance
Resolution 19: Authority to make political donations
In order to comply with its obligations under the Companies Act 2006
and to avoid any inadvertent infringement of that Act, the Board wishes
to renew its existing authority for a general level of political donation and/
or expenditure. Resolution 19 seeks to renew the existing authority for
the Company to make political donations and incur political expenditure.
The Companies Act 2006 requires this authority to be divided into three
heads (as set out in Resolution 19) with a separate amount specified
as permitted for each. An amount not exceeding £250,000 for each
head of the authority has been proposed. In accordance with the
Companies Act 2006, Resolution 19 extends approval to all of
the Company’s subsidiaries.
This authority will expire at the conclusion of the Annual General Meeting
of the Company in 2017, unless renewal is sought at that meeting.
The Company and the Group do not make any donations to
political parties or organisations and do not intend to going forward,
but do support certain industry-wide bodies such as the Home Builders
Federation in the UK. Whilst the Board does not regard this as political
in nature, in certain circumstances such support together with donations
made for charitable or similar purposes could possibly be treated as a
donation to a political organisation under the relevant provisions of the
Companies Act 2006. For example, a donation to a humanitarian charity
which may also operate as a political lobby, sponsorship, subscriptions,
paid leave to employees fulfilling public duties and payments to industry
representative bodies could constitute a donation to a political
organisation within the current definitions in the Companies Act 2006.
Details of the Company’s and the Group’s charitable donations appear
on page 90 of the Report and Accounts.
Resolutions 20 to 22: Substantial property transactions
Pete Redfern, a Director of the Company, is proposing to purchase,
subject to shareholder approval, two properties from Taylor Wimpey de
España S.A.U., a wholly owned subsidiary of the Company, at its Costa
Beach development in Port Vell, Son Servera, Mallorca.
Ryan Mangold, a Director of the Company, is proposing to purchase,
subject to shareholder approval, a property from Taylor Wimpey UK
Limited, a wholly owned subsidiary of the Company, at its Radius
development in Osiers Road, Wandsworth, London, SW18.
As each transaction is in excess of £100,000, it constitutes a substantial
property transaction with a Director of the Company under sections 190
and 191 of the Companies Act 2006 and therefore requires the approval
of shareholders, which is being sought at this Annual General Meeting.
The first property proposed to be acquired by Pete Redfern is a
first floor, two bedroom apartment (no. 3-1-2 on the Costa Beach
development in Mallorca) for the sum of €278,000 representing full
market value. A contract for the purchase will be entered into prior
to the Annual General Meeting, which will be conditional on receiving
approval for the transaction from the Company’s shareholders at the
Annual General Meeting. The purchase price will be paid in full by Pete
Redfern prior to the Annual General Meeting and, in the event that
shareholder approval is not forthcoming, these monies would then
be repaid to him.
The calculation of the price paid by Pete Redfern (excluding VAT or any
other taxes) is as follows:
Price paid by Pete Redfern including reservation fee of €6,000
paid on 8 March 2016 (and sum to be repaid in the event
that shareholder approval is not forthcoming at the AGM):
€278,000
The price of €278,000 represents £215,504 at the exchange rate of
£1 = €1.29 on 8 March 2016, being the latest practicable date prior
to the completion of this Notice of Meeting.
The second property proposed to be acquired by Pete Redfern is
a top floor, two bedroom apartment (no. 2-2-6 on the Costa Beach
development in Mallorca) for the sum of €375,000 representing full
market value, from which a standard employee discount of 5% is
to be deducted. A contract for the purchase will be entered into
following the Annual General Meeting, should shareholder approval
be obtained at that meeting.
The calculation of the price payable by Pete Redfern (excluding VAT or
any other taxes) is as follows:
Price upon reservation (8 March 2016):
Standard employee discount (5%) available to all
Taylor Wimpey employees:
Price payable by Pete Redfern:
Standard reservation fee paid on 8 March 2016:
Balance to be paid by Pete Redfern
(if shareholder approval is given):
€375,000
€18,750
€356,250
€6,000
€350,250
The price of €356,250 represents £276,163 at the exchange rate of
£1 = €1.29 on 8 March 2016, being the latest practicable date prior
to the completion of this Notice of Meeting.
The Costa Beach development comprises a residential scheme built
by Taylor Wimpey de España S.A.U. All purchasers have the option of
buying standard fitted extras on commercial terms comprising domestic
electrical appliances for the kitchen and fixtures for the bathroom. For
both properties, Pete Redfern has elected to purchase such extras in
each case at a price of €8,000 that represents £6,202 at the exchange
rate of £1 = €1.29 on 8 March 2016, being the latest practicable date
prior to completion of this Notice of Meeting, and will receive no
discount on these items.
www.taylorwimpey.co.uk
The terms of each proposed purchase by Pete Redfern and Ryan
Mangold have been subjected to the usual level of scrutiny and
review applied to all staff discount purchases and has included
a review by the Company’s Internal Audit function.
The Board believes the terms of the proposed agreements will be fair
and reasonable and that the prices being paid by Pete Redfern and
Ryan Mangold will be the market value of each property (less the
standard discount of 5% as described above on each of the second
property only for Mr. Redfern and the property for Mr Mangold) as at the
date of exchange of contracts. Under the standard employee house
purchase discount scheme (which offers employees a discount of 5%),
employees are only entitled to purchase one property from the Company
with discount in any twelve month period.
Special Resolution
Resolution 23: Notice of general meetings
Special resolutions require at least a 75% majority of votes cast to
be cast in favour.
This resolution will be proposed as a special resolution and therefore
requires a 75% majority of votes to be cast in favour. The Companies
(Shareholders’ Rights) Regulations 2009 have increased the notice
period required for general meetings of the Company to 21 clear days
unless shareholders agree to a shorter notice period, which cannot
be less than 14 clear days. At the 2015 Annual General Meeting,
a resolution was passed approving the Company’s ability to call general
meetings (other than Annual General Meetings, which will continue to
be held on at least 21 clear days’ notice) on not less than 14 clear days’
notice. As this approval will expire at the conclusion of this Annual
General Meeting, Resolution 23 proposes its renewal. The shorter
notice period of 14 clear days would not be used as a matter of routine
for any general meeting, but only where the flexibility is merited by the
business of a particular meeting and is thought to be to the advantage
of shareholders as a whole. The renewed approval will be effective until
the Company’s Annual General Meeting in 2017, when it is intended
that a similar resolution will be proposed.
Note that in order to be able to call a general meeting on less than
21 clear days’ notice, the Company must in respect of that meeting
make available electronic voting to all shareholders.
Each purchase price was agreed following a rigorous review of
the prices already obtained in the open market for similar properties,
less a discount of 5% for the second property only, pursuant to the
Company’s standard employee discount scheme which is open to
all employees following an initial period of employment. Other than
the standard employee discount which applies to the second property
only, the price being paid by Pete Redfern in each case assumes that
the transaction is an arm’s length sale. The agreements between Taylor
Wimpey de España S.A.U. and Pete Redfern will in each case, be a
standard form sale and purchase agreement used by Taylor Wimpey
de España S.A.U. for the Costa Beach development, save the contract
for the first property will be conditional upon the approval of the
Company’s shareholders.
The property proposed to be acquired by Ryan Mangold is an apartment
(Plot 90) for the sum of £648,964 on the Radius development in Osiers
Road, Wandsworth, London, SW18. A contract for the purchase will be
entered into prior to the Annual General Meeting conditional on receiving
approval for the transaction from the Company’s shareholders at the
Annual General Meeting. The purchase price will be paid in full by Ryan
Mangold prior to the Annual General Meeting and in the event that
shareholder approval is not forthcoming at the Annual General
Meeting, then these monies would be repaid to him.
The calculation of the price payable by Ryan Mangold is as follows:
Price upon reservation:
Average discount available to
third party buyers:
Price payable by third party buyer:
Standard employee discount (5%)
available to all Taylor Wimpey employees:
Price payable by Ryan Mangold:
Amount paid by Ryan Mangold (including
reservation fee of £1,000 paid on 5 March 2016)
prior to the AGM (and sum to be repaid in the
event that shareholder approval is not
forthcoming at the AGM):
£710,000
£26,880
£683,120
£34,156
£648,964
£648,964
The Radius development in Wandsworth, London comprises a
residential scheme built by Taylor Wimpey UK Limited. The purchase
includes the supply of standard optional fitted extras, available routinely
to independent purchasers on similar commercial terms. The purchase
price was agreed following a rigorous review of the prices already
obtained in the open market for similar properties, less a discount of
5%, pursuant to the Company’s standard employee discount scheme
which is open to all employees following an initial period of employment.
Other than the standard employee discount, the price being paid by
Ryan Mangold assumes that the transaction is an arm’s length sale.
The agreement between Taylor Wimpey UK Limited and Ryan Mangold
will be a standard form sale and purchase agreement used by Taylor
Wimpey UK for the Radius development, save that it will be conditional
upon the approval of the Company’s shareholders and that in the event
that shareholder approval is not forthcoming, any monies that have
been paid by Ryan Mangold for the property will be repaid to him.
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Governance pages 42-91Financial Statements pages 92-146Shareholder Information pages 147-157Strategic Report pages 2-41 Taylor Wimpey plc
Annual Report and Accounts 2015
Shareholder Facilities
Shareholders’ services
Web communications
Shareholders have previously passed a resolution enabling the
Company to make documents and information available to shareholders
by electronic means and via a website, rather than by sending hard
copies. This way of communicating is enabled in accordance with
the Companies Act 2006, Rule 6 of the Disclosure and Transparency
Rules and the Company’s Articles of Association.
CREST
The Company offers shareholders who hold their Taylor Wimpey
shares in CREST a facility for the receipt of dividends through
the CREST system.
For shares held in uncertificated form (CREST), please note that
elections continue to apply only to one dividend and a fresh
election must be made, via CREST, for each dividend.
Making documents and information available electronically:
• Enables the Company to reduce printing and postage costs.
• Allows faster access to information and enables shareholders
to access documents on the day they are published on the
Company’s website.
• Reduces the amount of resources consumed, such as paper,
and lessens the impact of printing and mailing activities on
the environment.
The Company provides hard copy documentation to those shareholders
who have requested this and is, of course, happy to provide hard copies
to any shareholders upon request.
The Company’s website url is www.taylorwimpey.co.uk and shareholder
documentation made available electronically is generally accessible at
www.taylorwimpey.co.uk/corporate/shareholder-information
Electronic communications
The Company also encourages shareholders to elect to receive
notification of the availability of Company documentation by means of
an email. Shareholders can sign up for this facility by logging onto our
website at www.taylorwimpey.co.uk/corporate/shareholder-information/
electronic-communications
Online facilities for shareholders
You can access our Annual and Interim Reports and
copies of recent shareholder communications online at:
www.taylorwimpey.co.uk/corporate/investor-relations/reporting-centre
To register for online access, go to www.taylorwimpey.co.uk/corporate/
shareholder-information and click on the service you require. To access
some of these services you will first be required to apply online.
Once you have registered for access, you can make online enquiries
about your shareholding and advise the Company of changes
in personal details.
Dividend Re-Investment Plan
You can choose to invest your cash dividends, including any special
dividend, in purchasing Taylor Wimpey shares on the market under
the terms of the Dividend Re-Investment Plan. For further information
on the Plan and how to join, contact Capita Asset Services.
Shareholders are again reminded to check the position with regard
to any dividend mandates that are in place, should you either wish
to participate in the DRIP or discontinue or vary any participation,
as existing mandates will apply to all dividend payments (including
special dividends) unless or until revoked.
Full details of the terms and conditions of the DRIP and the actions
required to make or revoke an election, both in respect of maintenance
dividends (i.e. in this case, the 2015 final dividend) and any special
dividends, are available at www.capitashareportal.com or on request
from the Registrar, Capita Asset Services, The Registry, 34 Beckenham
Road, Beckenham, Kent, BR3 4TU, email: shares@capita.co.uk
tel: +44 (0)371 664 0381. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the United Kingdom will be
charged at the applicable international rate. Lines are open between
9:00 am and 5:30 pm Monday to Friday excluding public holidays in
England and Wales.
Dividend mandates
We strongly encourage all shareholders to receive their cash dividends
by direct transfer to a bank or building society account. This ensures that
dividends are credited promptly to shareholders without the cost and
inconvenience of having to pay in dividend cheques at a bank. If you
wish to use this cost-effective and simple facility, complete and return
the dividend mandate form attached to your dividend cheque. Additional
mandate forms may be obtained from Capita Asset Services.
Duplicate share register accounts
If you are receiving more than one copy of our Report and Accounts,
it may be that your shares are registered in two or more accounts on
our Register of Members. You might wish to consider merging them
into one single entry. Please contact Capita Asset Services who will
be pleased to carry out your instructions in this regard.
Share dealing services
We have arranged both telephone and online share dealing services.
Capita Share Dealing Services allows you to buy and sell shares in a
large number of companies that have Capita as their registrar. The
services are operated by Capita Asset Services. To use the services
either visit www.capitadeal.com or telephone +44 (0)371 664 0445.
Calls are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the
applicable international rate. Lines are open between 9:00 am and
5:30 pm Monday to Friday excluding public holidays in England and
Wales. To deal, you will need to provide your surname, postcode, date
of birth and investor code (which can be found on your share certificate
or any form of proxy you have been sent). Shareholders are not in any
way obliged to use this service when dealing in the Company’s shares.
156
www.taylorwimpey.co.uk
Taylor Wimpey and CREST
Taylor Wimpey shares can be held in CREST accounts, which do not
require share certificates. This may make it quicker and easier for some
shareholders to settle stock market transactions. Shareholders who
deal infrequently may, however, prefer to continue to hold their shares
in certificated form and this facility will remain available for the time being,
pending the likely general introduction of dematerialised shareholdings
in due course.
Taylor Wimpey share price
Our share price is printed in many of the UK daily newspapers and
is also available on our website www.taylorwimpey.co.uk/corporate/
share-price-centre. It appears on BBC Text and other digital television
interactive services. It may also be obtained by telephoning the
FT Cityline service on telephone +44 (0)9058 171690 and ask for
‘Taylor Wimpey’ on the voice activated response (calls cost 75p
per minute from a BT landline, other networks may vary).
Gifting shares to charity
If you have a small holding of Taylor Wimpey plc shares, you may
wish to consider gifting them to charity. You can do so through
‘ShareGift’, which is administered by a registered charity, Orr Mackintosh
Foundation Limited. Shares gifted are re-registered in the name of the
charity, combined with other donated shares and then sold through
stockbrokers who charge no commission. The proceeds are distributed
to a wide range of recognised charities. For further details, please
contact Capita Asset Services or approach ShareGift directly on
www.sharegift.org or telephone them on +44 (0)20 7930 3737.
Unsolicited approaches to shareholders
and ‘Boiler Room’ Scams
We receive reports from time to time from Taylor Wimpey shareholders
who have each received what appear to be fraudulent approaches
from third parties with respect to their shareholding in the Company.
In some cases these are ‘cold calls’ and in others correspondence.
They generally purport to be from a firm of solicitors or an investment
company and offer, or hold out the prospect of, large gains on Taylor
Wimpey shares or other investments you may hold.
The approaches normally include the seeking of an advance payment
from the shareholder, the disclosure of the shareholder’s bank details
or the sale of an unrelated investment. Shareholders are advised to
be extremely wary of such approaches and advised to only deal with
firms authorised by the UK Financial Conduct Authority (FCA). More
information is available on our web site www.taylorwimpey.co.uk/
corporate/shareholder-information/boiler-room-scams and you can
check whether an enquirer is properly authorised and report scam
approaches by contacting the FCA on www.fca.org.uk/consumers/
or by calling +44 (0)800 111 6768.
Further information online
Delivering
quality for all
our stakeholders
Sustainability Report 2015
View our Report and Accounts online:
www.taylorwimpey.co.uk/corporate/annualreport2015
KPI
KPI
More information about our sustainability activities:
Further information about our sustainability activities and policies can
be found within our dedicated Sustainability Report on our website.
www.taylorwimpey.co.uk/corporate/sustainability
Annual General Meeting
11:00 am on 28 April 2016 at:
The British Medical Association, BMA House,
Tavistock Square, London, WC1H 9JP.
Latest date for receipt of proxy instructions for the 2016 Annual
General Meeting: 11:00 am on 26 April 2016.
Group Legal Director and Company Secretary
and Registered Office
James Jordan
Gate House
Turnpike Road
High Wycombe
Buckinghamshire
HP12 3NR
Tel: +44 (0)1494 558323
Fax: +44 (0)1494 885663
E-mail: james.jordan@taylorwimpey.com
Registrar
For any enquiries concerning your shareholding or details
of shareholder services, please contact:
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
E-mail: shareholderenquiries@capita.co.uk
Tel: 0871 664 0300 (UK)
Tel: +44 (0)20 8639 3399 (from overseas)
Calls cost 12p per minute plus your phone company’s access charge.
Calls outside the United Kingdom will be charged at the applicable
international rate. Lines are open between 9:00 am and 5:30 pm
Monday to Friday, excluding public holidays in England and Wales.
Auditors
Deloitte LLP
Solicitors
Slaughter and May
Stockbrokers
J.P. Morgan Cazenove
Jefferies Hoare Govett
Principal Operating Addresses
UK
Taylor Wimpey plc
Gate House, Turnpike Road
High Wycombe, Buckinghamshire
HP12 3NR
Taylor Wimpey UK Limited
Gate House, Turnpike Road
High Wycombe, Buckinghamshire
HP12 3NR
Tel: +44 (0)1494 558323
Fax: +44 (0)1494 885663
Tel: +44 (0)1494 558323
Fax: +44 (0)1494 885663
E-mail: twplc@taylorwimpey.com
Website: www.taylorwimpey.co.uk
Registered in England
and Wales number 296805
Details of all our operating locations
are available on our website
www.taylorwimpey.co.uk
Spain
Taylor Wimpey de España S.A.U.
C/Aragon, 223-223A
07008 Palma de Mallorca
Mallorca
Spain
Tel: + 34 971 706570
Fax: + 34 971 706565
157
Shareholder Information pages 147-157Strategic Report pages 2-41Governance pages 42-91Financial Statements pages 92-146 www.taylorwimpey.co.uk
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